Report No. 22181-PH
Philippines
Filipino Report Card on Pro-Poor Services
May 30, 2001
Environment and Social Development Sector Unit
East Asia and Pacific Region
Document of the World Bank
CURRENCY EQUIVALENTS
(As of May 30, 2001)
Currency unit = Peso
$1.00 = 50.57 Pesos
1.00 Peso - $0.02
FISCAL YEAR
January 1 - December 1
Vice-President Jemal-ud-din Kassum, EAP
Country Director Vinay Bhargava, EACPF
Sector Director Zafer Ecevit, EASES
Task Manager Bhuvan Bhatnagar, EASES
ABBREVIATIONS AND ACRONYMS
ACSI - American Customer Satisfaction Index
ADB - Asian Development Bank
AGILE - Accelerating Gross Investment and Liberalization with Equity
APIS - Annual Poverty Indicators Survey
ARMM - Autonomous Region of Muslim Mindanao
ASEAN - Association of Southeast Asian Nations
AusAid - Australian Agency for International Development
BHS - Barangay Health Station
BP - Batasang Pambansa
BWSA - Barangay Waterworks and Sanitation Association
CDA - Cooperative Development Authority
CDF - Congressional Development Fund
CENTEX - Center for Excellence in Public Elementary Education
CHAPEL - City Housing Acquisition of Private Lots
CIDSS - Comprehensive Integrated Delivery of Social Services
CMP - Community Mortgage Program
COA - Commission on Audit
COCA - Certificate of Occupancy
COMPAS - Center for Market and Survey Research
COPE - Community Organization of the Philippines Enterprise
CORE - City-Owned Lots Rehabilitation and Disposition
CWS - Clark Water & Sewerage
DBM - Department of Budget and Management
DBP - Development Bank of the Philippines
DECS - Department of Education, Culture and Sports
DEDP - Divisional Elementary Education Development Plan
DILG - Department of Interior and Local Govemment
DOF - Department of Finance
DOH - Department of Health
DPWH - Department of Public Works and Highways
DSWD - Department of Social Welfare and Development
EO - Executive Order
ERAP - Enhanced Retail Access for the Poor
ESC - Education Service Contracting
GAO - General Accounting Office
GASTPE - Government Assistance to Students for Private Education
GDP - Gross Domestic Product
GFI - Government Financing Institution
GH - Government Hospital
GLAD - Group Land Acquisition Development Program
GMA - Greater Manila Area
GOP - Government of the Philippines
GSA - General Services Administration
GSIS - Govermment Service Insurance System
HDMF - Home Development Mutual Fund (or PAG-IBIG)
HH - Household
Filipino Report Card on Pro-Poor Services
HHH - Household Head
HSRA - Health Sector Reforn Agenda
HUDCC - Housing and Urban Development Coordinating Council
IBRD - International Bank for Reconstruction and Development
ICSI - Institute on Church and Social Issues
IMR - Infant Mortality Rate
IPC - Institute of Philippine Culture
IRA - Internal Revenue Allotment
KG - Kilogram
LBP - Land Bank of the Philippines
LGU - Local Govermment Unit
LGUUWSP - Local Government Unit Urban Water and Sanitation Program
LWUA - Local Water Utilities Authority
MBN - Minimum Basic Needs
MCWD - Metro Cebu Water District
MFI - Multilateral Financial Institution
MSO - Marikina Settlements Office
MTWG - Municipal Technical Working Group
MWCI - Manila Water Company, Inc.
MWLP - Multi-Window Lending Program
MWSI - Maynilad Water Services, Inc.
MWSS - Metropolitan Waterworks and Sewerage System
NAPC - National Anti-Poverty Conmmission
NCR - National Capital Region
NEDA - National Economic Development Authority
NFA - National Food Authority
NGA - National Government Agency
NGO - Non-Government Organization
NRA - National Housing Authority
NHMFC - National Home Mortgage Finance Corporation
NSCB - National Statistical Coordination Board
NSO - National Statistics Office
NSP - National Shelter Program
NWRB - National Water Resources Board
NWRC - National Water Resources Council
O&M - Operations and Management
OCW - Overseas Contract Worker
ODA - Official Development Assistance
OECF - Overseas Economic Cooperation Fund
PAB - Project Advisory Board
PAC - Public Affairs Center
PCER - Presidential Commission on Educational Reform
PAF - Poverty Alleviation Fund
PD - Presidential Decree
PHIC - Philippine Health Insurance Corporation
PhilHEALTH - Philippine Health Insurance
PHILSSA - Philippine Support Service Agencies
Filipino Report Card on Pro-Poor Services
PhP - Philippine Peso
PIDS - Philippine Institute of Development Studies
PNC/H - Private Non-Profit Clinic/Hospital
PO - People's Organization
PPAS - Public Performance Audit System
PPC/H - Private For-Profit Clinic/Hospital
PTA - Parent-Teacher Association
PTFWRDM - Presidential Task Force on Water Resources Development and
Management
PWUA - Provincial Water Utilities Act
RA - Republic Act
RHU/C - Rural Health Unit/Urban Health Center
RP - Republic of the Philippines
SIDCA - Swedish International Development Cooperation Agency
SBWS - Subic Bay Water & Sewerage
SRP - Self-Rated Poverty
SSS - Social Security System
SWS - Social Weather Stations
TA - Technical Assistance
TEEP - Third Elementary Education Project
TFS - Tuition Fee Subsidy
TH/A - Traditional Healer/Attendant
UHC - Urban Health Center
UK - United Kingdom
UN - United Nations
UNCHBP - United Nations Centre for Housing, Building and Planning
UNDP - United Nations Development Programme
UNICEF - United Nations Children's Educational Fund
UPA - Urban Poor Associates
UPAO - Urban Poor Affairs Office
URC - Urban Research Consortium
WB - World Bank
WD - Water District
WHO - World Health Organization
TABLE OF CONTENTS
SUMMARY ........................................I
1. Introduction .i
2. Summary Findings .vi
3. Institutionalization of the Report Card .xx
CHAPTER I: INTRODUCTION ..1
1. What is the Report Card .1
2. Why Prepare a Report Card9 .2
3. What Does the Report Card Present .4
4. How are the Poor Identified? .5
5. How Participatory is the Report Card? 6
6. Structure of the Report .8
7. Last Word .9
CHAPTER II: HEALTH ..10
1. Poverty and Health .10
2. The Survey .1
3. Use and Access .11
4. Services Provided by Health Facilities .14
5. Satisfaction with Heath Facilities .16
6. Health Expenditures .20
7. Key Findings and Recommendations .23
8. The Government Health Sector Reform Agenda .27
CHAPTER III: ELEMENTARY EDUCATION . .30
1. Poverty and Education .30
2. The Survey .31
3. Use and Access .31
4. Drop-Outs .33
5. Satisfaction with Elementary Schools .34
6. Household Expenditure on Schooling .38
7. Parent-Teacher Associations .40
8. Key Findings and Recommendations .42
CHAPTER IV: WATER SUPPLY . .49
1. Poverty and Potable Water .49
2. The Survey .52
3. Access .52
4. Reasons for Not Applying .55
5. Water Consumption .57
6. Household Expenditure on Water .60
7. Satisfaction with Water Supply Services .62
8. Key Findings and Recommendations .63
Filipino Report Card on Pro-Poor Services
CHAPTER V: HOUSING .. .................................. 71
1. Poverty and Housing ....................................... 71
2. Structure of the Chapter ....................................... 72
3. The Survey ....................................... 73
4. Client Assessments of Current Housing ....................................... 74
5. Client Assessments of Housing Services ............ ........................... 83
6. Key Findings and Recommendations ....................................... 92
CHAPTER VI: SUBSIDIZED RICE DISTRIBUTION . ............................ 103
1. Poverty and Food Security ....................................... 103
2. NFA's Mandate ....................................... 103
3. The Survey ....................................... 105
4. Rice Consumption ....................................... 105
5. Household Expenditure on Rice ....................................... 107
6. Awareness and Access ....................................... 109
7. Factors Influencing Rice Purchases ....................................... 110
8. Targeting Rice Subsidies to the Poor ........................................111
9. ERAP (Enhanced Retail Access for Poor) Stores ....................................... 113
10. Key Findings and Recommendations ........... ............................ 115
11. Targeted Low-Priced Rice Distribution Pilot Program ...................................... 117
CHAPTER VII: LINGAP PARA SA MAHIHIRAP PROGRAM ................................ 120
1. Poverty Alleviation Funds ................................................. 120
2. Lingap Para sa Mahihirap Program .................. ............................... 122
3. Funding ................................................. 123
4. Progress to Date ................................................. 125
5. The Survey ................................................. 126
6. Awareness ................................................. 126
7. Inclusion of Non-Poor Barangays ................ ................................. 127
8. Inclusion of Non-Poor Households ................................................. 128
9. Role of Elected Representatives ............... .................................. 129
10. Key Findings and Recommendations ................................................. 133
CHAPTER VIII: INSTITUTIONALIZATION OF THE REPORT CARD ..................... 137
1. Why Institutionalize the Report Card? ................................................. 137
2. Global Experience with Report Cards ................................................. 138
3. Institutionalizing the Report Card in the Philippines ......................................... 141
4. Improving the Report Card ................................................. 143
Filipino Report Card on Pro-Poor Services
APPENDIX 1: SAMPLE DESIGN AND METHODOLOGY .................................... 145
1. Itroduction .145
2. Sample Size .145
3. Geographic Distribution of the Sample .145
4. Questionnaire .148
5. Survey Execution .151
6 Household Characteristics .152
7. Urban-Rural Distribution of Households .154
8. Poverty Classifications .154
9. Data Analyses .156
BIBLIOGRAPHY . 66
ACKNOWLEDGEMENTS
The Filipino Report Card on Pro-Poor Services is prepared by a team led by Bhuvan
Bhatnagar, Task Team Leader, and comprising Musunuru Sam. Rao and Adarsh Kumar.
The client satisfaction survey, on which the Report Card is based, has been designed and
implemented by the Social Weather Stations, under the direction of Mahar Mangahas
and Linda B. Guerrero. The sector chapters are prepared by Joven Balbosa, Jayshree
Balachander, Carol V Figueroa-Geron, Vijay Jagannathan, Mariles Navarro, Ching
Dela Pena, and Mary Racelis, with inputs from the Report Card Team. Ganesan
Balachander, Cyprian Fisiy, Marita Concepcion C. Guevara, Angie Ibus, Manny
Jimmenez, Smita Lahiri, Juri Oka, Samuel Paul, Parmesh Shah, and Anna Wetterberg
provided valuable suggestions and inputs. In addition to direct contributions to its
contents, the Report Card has benefitedfrom the comments andfeedback of several
hundred reviewers both inside and outside the Bank. Cheloy Tria provided excellent
production support.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
SUMMARY
"I believe in listening to and learning from those whom I serve. I will ensure that my
organization creates and respects genuine mechanisms for regularfeedbackfrom our citizen-
customers, and subsequently uses this feedback to render better service to them. "
President Gloria Macapagal-Arroyo'
1. INTRODUCTION
A. What is the Report Card?
1. The Report Card is a means by which citizens can provide credible and collective
feedback to public agencies about their performance. It brings forth information on
users' awareness, access, use and satisfaction with public services. It is an important
follow-up to the World Bank's Philippines Poverty Assessment.2 It complements the
expert analyses and findings in the Poverty Assessment with a "bottom-up" assessment of
pro-poor services in five key sectors -- health care, elementary education, water supply,
housing and subsidized rice distribution.3
2. The Report Card identifies the key constraints that Filipinos face in accessing
public services, their appraisals of the quality and adequacy of public services, and the
treatment they receive in their interactions with service providers, especially government
officials. It offers several recommendations on sector and sub-sector policies, strategies
and programs to address the constraints and improve service delivery, especially to the
poor and under-served areas and groups.
3. The Report Card is based on a national client satisfaction survey undertaken by
the World Bank in collaboration with the Social Weather Stations (SWS), a premier
survey research organization in the Philippines that is independent, non-partisan and
credible. The survey was implemented from March 26 to April 17, 2000. It covered
1,200 households, distributed nationwide in four broad regions: National Capital Region
(NCR), Balance Luzon,4 Visayas, and Mindanao -- in proportion to their population. In
keeping with global best practice, client satisfaction with public services in the
1 President Gloria Macapagal-Arroyo required her Cabinet members to undertake a pledge to be
accountable to eleven service standards, including responsiveness to Constituency Feedback.
2Philippines Poverty Assessment, The World Bank, Washington, D.C., June 14, 2000.
3 These five sectors are key elements of the government's poverty reduction efforts under the Minimum
Basic Needs (MBN) approach, which include the Social Reform Agenda of the Ramos Administration and
the flagship Lingap Para sa Mahihirap Program of the Estrada Administration.
4Rest of Luzon excluding NCR.
Filipino Report Card on Pro-Poor Services ii
Summary
Philippines is assessed using the results for the services provided by the private sector as
benchmarks.5
B. Why Prepare a Report Card?
4. There is a growing concern in the Philippines about the performance and
accountability of public agencies that deliver services, especially to the poor. Most
accountability mechanisms for public agencies focus on inputs (e.g., number of
personnel, facilities, and expenditures) and occasionally on broad outcome indicators
such as literacy and mortality rates. Beyond this arithmetic, little is known about the
QUALITY of services delivered by the State. It is therefore difficult to identify specific
areas for improvement to make public services more responsive to and effective in
meeting the needs of the users.
5. There are a number of evaluations of pro-poor programs in the Philippines,
undertaken by service providers and experts that often identify program-specific
problems and issues with little connection to sectoral and cross-sectoral dimensions.
Also, very few of the evaluations and assessments are done from the client perspectives.
The Report Card initiative was launched to undertake an assessment of pro-poor services
by citizens, based on their experience. In addition, the Report Card helps to pull together
the myriad individual problems facing the various programs into common sectoral issues,
by drawing attention to the worst problems and good practices in the five selected
sectors. By ranking and quantifying issues, it brings into limelight those concerns that
trouble the clients most and can trigger public pressure and collective action.
6. To be effective, traditional public accountability systems need to be strengthened
and reinforced through adoption of innovative approaches that involve public
participation. Those at the receiving end -- clients/users or Filipino citizens -- are well
placed to provide systematic feedback to service providers and policy makers on the
results of government actions that are intended to benefit them. While most users may
not be able to comment on complex technical matters, they are eminently qualified --
EXPERTS -- on whether the public services meet their needs and expectations, whether
specific aspects are satisfactory or unsatisfactory, and whether the concerned agencies are
responsive, reliable, and accountable.
7. The Report Card is a timely initiative, which should help translate the renewed
commitment of Filipinos6 to a democratic, transparent and accountable State that
responds to the needs of the people, especially the poor. It builds upon the previous
Administration's commitment to "treat each citizen as a customer in much the same way
as the best private companies treat their clients." This commitment is reiterated by
President Gloria Macapagal-Arroyo, who required her Cabinet members to sign a Pledge
5 For example, see Federal Agencies Government-wide Customer Satisfaction Report for the General
Services Administration, December 1999, University of Michigan Business School, American Society for
Quality, and Arthur Anderson.
6 After the successful non-violent People Power II revolution in January 2001.
Filipino Report Card on Pro-Poor Services iii
Summary
to be accountable to eleven service standards, including responsiveness to Constituency
(client) Feedback.7
8. This shift to think of Filipinos as customers or clients rather than beneficiaries
requires that their "voices" count in the design, delivery and assessment of public
services. Private firms operating in a competitive environment make use of this approach
and use the information gathered through client surveys to redesign their products to meet
customer needs and enhance customer loyalty. User feedback is especially important for
government service providing agencies as they often operate as monopolies or
oligopolies where people (particularly, poor people) may have few viable and affordable
alternatives. For example, aspects such as quality of services, timeliness of service
delivery, and responsiveness of agency personnel may leave much to be desired, but
market pressures (through, for example, competition in service provision at comparable
prices) are missing to rectify the deficiencies. Client feedback is a much-needed
corrective in this setting, which can be used either by reform-minded champions in the
government and/or as a trigger for public pressure to improve performance.
9. While user report cards and client surveys are new to most governments and their
agencies, these are now being used as a way to assess performance of public agencies in
several countries including Canada, Denmark, Ghana, India, Sweden, United Kingdom,
United States, and Uzbekistan. In these cases, quantifying and grading different
dimensions of public services from the perspective of users is helping government
agencies measure and benchmark their performance, understand the factors that
contribute to it, and respond better to the needs and expectations of the people they serve.
C. What Does the Report Card Present?
10. The Report Card presents people's perspectives on pro-poor services that are not
always captured in traditional evaluations by experts and in the routine reports of
agencies providing the services.8 The client assessments bring forth valuable insights
into such critical dimensions as awareness, availability, and affordability of pro-poor
services from different service providers (e.g., government, private sector and other
sources). These service dimensions are presented from the perspectives of different
population groups, differentiated by geographic region, rural and urban residence, and
level of household expenditure. These should be key inputs in the design and
improvement of effective service delivery programs. They should be seen as
complementing the findings of expert evaluations and agency reports.
11. The insights derived from the Report Card should be helpful in understanding the
degree to which the pro-poor services are reaching the target groups, the extent of
leakages, and factors that contribute to such misdirection of resources and services. They
help identify the physical availability, quality and cost factors that constrain the access to
7 See quote from President Gloria Macapagal-Arroyo at the beginning of this Summary.
8 For example, some of the new insights emerging from the Report Card that have not been captured by
traditional surveys to-date, include health/disability-related reasons for dropping out of elementary school
and the high dissatisfaction of rural households with their housing. These findings deserve further scrutiny
and follow-up.
Filipino Report Card on Pro-Poor Services iv
Summary
and use of the services by the poor and possible means to rectify the situation. The latter
includes suggestions by the respondents (citizens) on the types of programs that might
enhance service delivery to and use by the poor. Also, the Report Card results help test
some of the policy conclusions in other analytical studies9 from the clients' standpoint.
Thus, it complements the analytical work of the World Bank and others from a "bottom-
up" perspective. The client appraisals from the Report Card survey need to be
augmented with expert assessments and agency reports to obtain a comprehensive picture
of the strengths and weaknesses of service provision to various groups. To this end,
secondary data have been used to complement and crosscheck, wherever available.
D. How are the Poor Identified?
12. The primary poverty measure in the Report Card is based on household
expenditures. Households with expenditures in the bottom three expenditure deciles
(bottom 30%) are classified as poor;'0 those with expenditures in the fourth to sixth
deciles (middle 30%) as middle-income; and those with expenditures falling in the top
four expenditure deciles (top 40%) as rich. This helps link the quantitative poverty
information from the expenditure module of the Annual Poverty Indicators Survey
(APIS) with client feedback on pro-poor services in the Report Card.
E. How Participatory is the Report Card?
13. Planning the Report Card survey began with consultations with key stakeholder
groups in government, private sector, civil society, and selected academic institutions in
the Philippines. The inputs of different stakeholders were actively solicited and
incorporated in the design of the survey questionnaire. After completion of the
fieldwork, preliminary data tables were prepared and the initial findings drawing upon
the tables were presented to stakeholder representatives in regional workshops in Manila,
Clark and Cebu during June 2000. The participants identified a number of nuances that
were helpful in explaining the apparent discrepancies between the Report Card results
and sector level data." Altogether, the feedback from the participants in the workshops
helped in validating the preliminary results from the Report Card survey. Also, the
stakeholder representatives suggested areas for further analysis and additional tabulations
in the Report Card, which have been taken on board and implemented. The strong
stakeholder participation in the preliminary workshops suggests that there is interest in
the Report Card findings, and positive expectations regarding the follow-up actions.
14. Detailed tabulations of the Report Card survey responses, analyses and
interpretation of the results were carried out during the succeeding six-months. A
number of World Bank sector specialists and national experts prepared the write-ups on
9 For example, the reconmmendations in the Philippines Poverty Assessment such as abolishment of a
general rice subsidy and weak performance of the Lingap Para sa Mahihirap Program.
'° About 30% of Filipinos are classified as poor by official sources.
it For example, according to official data, the teacher pupil ratio is lowest in Mindanao, while the Report
Card results (confirmed by the feedback from the participants from Mindanao) show that large class size is
a problem in Mindanao.
Filipino Report Card on Pro-Poor Services v
Sunmary
the five sectors utilizing the final data tables. They married the Report Card survey
findings with sector level data from different sources and presented a comprehensive
picture of the situation in the sectors. The detailed data tables and draft sector write-ups
have been shared with the government (through NEDA) to encourage independent
scrutiny and validation of the analysis by the government. A number of initiatives and
actions are already under way to address some of the constraints identified by the users.'2
Additional actions at the sector, program and project levels are recommended to improve
service delivery by public agencies, enhance complementarity between public, private
and civil society service providers, sharpen targeting of the services, and promote
accountability to the clients at the grassroots.
15. The draft Report Card was finalized based on feedback from different
stakeholders. The next step is to stimulate informed dialogue and follow-up actions by
development partners to improve service delivery. Different versions of the Report Card
will be produced and disseminated to cater to the needs of various target audiences.13
The follow-up dissemination actions include:
• Individual consultations with concerned public agencies on the Report Card results to
help them understand client concerns, how ongoing and proposed actions in the sector
are likely to address these, and identify necessary adjustments and additional actions
to better respond to client needs;
* Consultations between different public agencies on common citizen concems that
span across sectors to help evolve approaches to addressing the common problems
(sectoral and systemic) by service providers and by coordinating agencies (e.g.,
NAPC, NEDA, DBM and DOF), and to learn from the successes and mistakes of
different approaches adopted by the various agencies;
* Consultations between service providers (public, private and civil society
organizations) and citizens to help the different groups appreciate the constraints and
strengths faced by each; identify potential complementarities and explore ways of
exploiting them; and reach agreement on mutual obligations, responsibilities and
commitments;
* Targeted dissemination to the legislative branch of the govenment to facilitate
discussion of the implications of the Report Card findings;
* Advocacy and dissemination of the main findings of the Report Card through the
media and regional stakeholder workshops to help Filipinos, including the poor,
12 For example, the implementation of the Health Sector Reform Agenda, which addresses several
constraints identified by the clients has begun, albeit, on a modest scale.
13 For example, busy policy makers may require a short note sunmmarizing the key findings, as included in
this Summary, along with selected data tables. On the other hand, sector specialists may require more in-
depth analysis as presented in the sector chapters in the main text. Ordinary citizens may value yet another
form of the Report Card; perhaps a "folksy" version, in local languages, which demystifies service
provision and provides information in a simple form.
Filipino Report Card on Pro-Poor Services vi
Summary
understand the situation, possible options, and ways in which concerns of the poor
and under-served could be "voiced" to make a difference in service delivery; and
* Distribution of the Report Card data on user-friendly compact discs to analysts,
researchers, and others interested in carrying out independent analyses and
interpretation of the results.
2. SUMMARY FINDINGS
16. The Filipino Report Card captures citizen assessments of the five sectors and the
Lingap Para sa Mahihirap (or Caring for the Poor) Program. These assessments are
summarized and presented below and discussed in greater detail in the main text.
Readers may also wish to read the main text to review the Report Card data and
secondary information, which support these findings. Where appropriate, key
implications of the Report Card findings for sector policies and operations are also
presented below and discussed in greater detail in the main text.
A. HEALTH
17. Health facilities included in the Report Card are barangay health stations, rural
health units/urban health centers, government hospitals, private clinics/hospitals, non-
profit clinics/hospitals, and traditional healers. More than three-fourths of the
respondents have utilized at least one of these health facilities in the twelve months
preceding the survey.
* The non-poor use health facilities more than the poor. Urban residents visit health
facilities more than rural residents. A larger proportion of the better-off visit health
facilities, compared to the poor, although poor Filipinos are more likely to suffer from
ill health. Those who do not go to health facilities give absence of illness, self-
medication and high cost of medical care as reasons.
* Public facilities14 are low in cost, but inferior in quality. Health services provided
by public facilities are used mainly by those who cannot afford the widely preferred
private services. Compared to government facilities, private facilities'5 are ranked
superior on all quality aspects (care, facilities, personnel, medicines and convenience)
by the clients. Low cost (of treatmnent, medicines and supplies and flexibility of
payment) is the only advantage of government facilities over private facilities. The
quality aspects of government health facilities require significant improvement.
14 Public health facilities included in the Report Card are barangay health stations, rural health units/urban
health centers, and governrent hospitals.
'5 Private health facilities included in the Report Card are private clinics/hospitals and non-profit
clinics/hospitals.
Filipino Report Card on Pro-Poor Services vii
Summary
. Primary facilities16 are frequently bypassed. Primary government facilities
appropriately provide preventive health services and treatment for minor
illnesses/accidents. However, a sizeable number of Filipinos bypass these primary
health facilities, even when highly accessible, in favor of government hospitals and
private clinics/hospitals. Thus, government hospitals end up providing the same
services as primary facilities, with only a third of their business consisting of
specialty services like care for major illnesses and accidents. The quality of primary
facilities is perhaps the single most pressing issue for consumers. The patient
classification system and referral mechanisms also need considerable improvement.
* Public primary facilities are noted for low quality. Those who bypass the primary
health facilities are dissatisfied with their quality. In fact, client satisfaction is lowest
for frontline barangay health stations and health centers at the grassroots, compared
to the other facilities included in the Report Card. Diagnosis is poor, resulting in
repeat visits. Medicines and supplies are inferior and rarely available. The personnel
are often absent, especially in rural areas, and are perceived to lack both medical and
people skills. Waiting time is long, facility schedule is very inconvenient, and
facilities are rundown.
* Primary facilities are mostly used by the poor. Private clinics/hospitals are more
likely to be visited in Metro Manila and in other urban areas, and by the non-poor.
On the other hand, residents of Mindanao, rural households, and the poor are more
likely to visit government primary facilities and traditional healers. About a tenth of
the users of private facilities, mostly in Mindanao, do not have access to any
government facility. There may be some quick gains for the poor by placing primary
health care providers in remote unserviced barangays or linking them to private
providers, where possible.
* Improving primary facilities is pro-poor. Since public primary facilities are mostly
frequented by the poor, improving their quality, with particular emphasis on services
demanded by the poor, would greatly enhance their pro-poor nature. This would also
reduce inefficient use of public hospitals, which are now mainly providing primary
health care. The Sentrong Sigla program of the Department of Health, which
provides a seal of approval to facilities that meet certain quality standards, is a good
initiative in this regard and should be strengthened. Targeted assistance, most likely
geographically focused on poorer and isolated communities (in rural areas and
Mindanao), is required to upgrade primary facilities to Sentrong Sigla standards.
* Government hospitals require quality upgrading, too. The non-poor, especially
middle-income households, are twice as likely to use government hospitals compared
to the poor. While clients rate government hospitals higher than public primary
facilities, there remains a significant quality deficit compared to private facilities. For
example, clients favor private facilities two-to-one over govenment hospitals in
16 Primary government facilities, included in the Report Card are barangay health stations and rural health
units/urban health centers.
Filipino Report Card on Pro-Poor Services viii
Summary
NCR. This is particularly disconcerting since a large share of the national
government budget for health is spent on NCR hospitals. The priority for government
hospitals is to improve service quality through financial autonomy and market
pressure, or to go out of business and leave service provision to the private sector.
* The poor pay more in relative terms. Median annual household expenditure on
health is PhP1,180 (about $25), and in absolute amounts, the rich spend ten times
more on average than the poor on health care (about $100: $10). This is largely due
to patronage of cheaper, lower-quality government services by the poor. However,
even the modest health expenditures of the poor absorb a larger share of their income,
as compared to the rich.
* The poor especially need insurance coverage. Insurance coverage could lighten the
medical burden of all Filipinos, especially the poor. While a third of the population is
protected by health insurance, about 1% of the poor are covered. Thus, payments for
health care by the poor are almost entirely out of pocket, effectively limiting their use
of care for catastrophic illnesses and quality (private) care. Expanding health
insurance coverage for the poor can be achieved by increasing contributions from
national and local governments to subsidize insurance premiums for the poor and
expanding membership of the non-poor to allow greater cross-subsidies from the non-
poor to the poor.
- High prices of medicines are a burden. Medicines and supplies account for the
largest share of household medical expenses, at 49%. This is even bigger than the
33% share of bills for hospital stay and the 10% share of bills for consultation and
treatment. It is urgent to cut the prices of medicines, which are significantly higher in
the Philippines than in the rest of the ASEAN. Recognizing this, the government has
initiated a parallel drug importation program from countries such as India, where the
same patented drugs are sold for a fraction of the price in the Philippines. In addition,
use of competitive international bidding procedures for procurement has helped
reduce the price of some drugs, like for tuberculosis, by half. The challenge for the
government is to reduce these costs by either intervening on the supply side (prices,
volumes) and/or the demand side (monitoring prescribers/dispensers and educating
consumers).
* Implement the Health Sector Reform Agenda (HSRA)17 The HSRA proposes to
make the health system in the Philippines more pro-poor by: (i) expanding health
insurance coverage for the poor; (ii) improving the quality and accessibility of health
care for the poor in public primary facilities; (iii) reducing the cost of medicines and
expenditures on hospital stays; and (iv) improving quality in government hospitals. If
successfully implemented, the HSRA could fully respond to the findings of the
Report Card above. To this end, the new Administration is urged to continue with the
HSRA, albeit in a more focused and sequenced manner, as its core elements are
validated by the citizen feedback on the performance of the health sector in the
Philippines.
1 Health Sector Reform Agenda, Philippines, 1999 -2004, Department of Health, Manila.
Filipino Report Card on Pro-Poor Services ix
Summary
B. ELEMENTARY EDUCATION
18. Elementary education in the Philippines is provided by public and private
(including sectarian) schools. More than nine out of ten school-age children are enrolled
in elementary schools, and 88% of them go to public schools. Access to public schools
has improved over time.
* Drop-outs are mostly from poor families. About three-fourths of the drop-outs
belong to poor households. They are more often located in rural areas. Two out of
five Filipino children not in school are Mindanao residents. Boys tend to drop out
more often than girls. Of those children who drop out of elementary school, 60% do
so in grades 4 and 5.
* Children drop out for health and economic reasons. Poor health (or disability) is
the top reason for dropping out, followed by economic reasons, like the high cost of
education, or the need for the child to work. A small proportion drop out due to poor
grades. To this end, the respondents recommend the following programs for helping
poor families: in-school health care, full exemption from miscellaneous fees, and
more qualified and better trained teachers. Targeted scholarships for poor families,
especially in rural areas, are also recommended.
* Drop-outs deserve special attention. Donor-financed projects have focused mostly
on poor provinces and those with low education achievement, especially in Mindanao
and Western Visayas. However, more needs to be done to enhance the demand from
families, primarily the poor, whose children are at risk of dropping out. Successful
NGO efforts should be supported or replicated in areas with high drop-out rates. The
identification by respondents of disabilities/health problems as the major reason for
dropping out deserves further exploration, and follow-up actions in collaboration with
the Department of Health.
* Public schools are low in cost, but inferior in quality. A majority of private and
public school patrons agree that private schools are better than public schools on
quality aspects. Public schools are rated higher by clients only on costs and
convenience of location. Those who can afford to pay send their children to private
schools. The quality aspects of public schools require significant improvement.
* Private school tuition is prohibitive. Because they are out of the reach of the poor
and most middle-income households, private schools are mainly patronized by the
rich, urban households, and residents of NCR. Unsurprisingly, these schools are
more often located where the better-off live. Social targeting could potentially enable
youth from low-income households to attend private schools. Experience from
government's ongoing GASTPE program can be instructive in this regard.
* Then again, public elementary education is far from free. Public education is
supposed to be free. In actual fact, families spend about 2% of total household
expenditures on each child enrolled in a public elementary school. A fifth of this
Filipino Report Card on Pro-Poor Services x
Summary
amount goes to miscellaneous fees and donations for the school's upkeep. These fees
are particularly high in the Visayas, and deserve further scrutiny. Transportation
accounts for about half of education expenses, and uniforms for about one fourth.
* Class size, textbooks, and facilities are rated poorly in public schools. Public
school patrons are most satisfied with location, perhaps as a result of the successful
implementation of the long-standing "one barangay, one school" policy of the
government. However, they are least satisfied with class size, availability of
textbooks and school facilities. Average class size in the Philippines (45) is much
higher than the average teacher to student ratio (35), largely due to poor deployment
of teachers. Five students, sometimes more, share a textbook, and the condition of
most school buildings is very poor. While current government expenditures may be
insufficient to adequately deal with these shortcomings, the main issue is the cost-
effectiveness of these public expenditures.
* Improving effectiveness of public expenditures is key. The textbook situation in
elementary schools is expected to improve dramatically with the procurement of 50
million textbooks under projects implemented with World Bank assistance. The
government is also committed to further textbook reform to ensure quality of
textbooks, timely delivery to schools and sustainability of supply. Redeployment of
teachers and reform of the school building program are required to address uneven
class size and poor facilities. All three areas of client dissatisfaction are the focus of a
Second Social Expenditure Management Project currently under development with
World Bank support.
* There is a sharp drop in client satisfaction with private schools. The fall is related
to tuition fee increases, slipping teacher performance, and deteriorating school
facilities. The lower rating for teacher performance should be of particular concern to
private schools, as this has been their main comparative advantage over public
schools. Unless private schools are able to arrest this decline, they are likely to lose
more students. This is bad news for public schools too, as it puts additional pressure
on their already strained resources.
* Implement a comprehensive teacher development strategy. The level of
competency of teachers is a complex problem, confronted by private and public
schools alike, and needs to be addressed through a comprehensive teacher
development strategy. The corrective actions should begin with attracting good
students, especially of mathematics and science, to the teaching profession;
revamping the teacher training curriculum; enforcing minimum standards in teacher
training institutions; reforming personnel policies; and instituting a periodic and
effective in-service training program.
* Parent-Teacher Associations (PTAs) are widespread. PTAs are found in 98% of
public schools, and two-thirds of the parents are PTA members. Participation of the
poor is higher than the national average -- three-fourths of poor households are PTA
Filipino Report Card on Pro-Poor Services xi
Summary
members -- and has improved over time. Four out of five private schools have PTAs,
and their numbers have risen over time.
* PTAs are a potent force for reform. Almost all of the poor say they are well
represented in PTAs. Public school PTAs are concerned equally with education and
fund raising, and members feel they have considerable influence on the teaching
programs. Private school PTAs are mostly concerned with education activities, and
members also feel that they have considerable influence on the teaching programs.
Thus, PTAs represent valuable social capital, which could help enhance
responsiveness, accountability and results-orientation in elementary schools. In
particular, the involvement of PTAs in monitoring school inputs and ensuring good
use of public funds has been largely overlooked, and is a tremendous resource waiting
to be tapped.
C. WATER SUPPLY
19. The government has classified three levels of water services, with norms on the
number of families they could serve. Level I is a point source (without any piped
distribution), like a spring or protected well, and is expected to serve an average of fifteen
households within 250 meters. Level II is a piped system with community faucets,
serving four to six households within 25 meters. Level III is a full waterworks system
with individual house connections for those residing in densely populated settlements. In
general, water that is not piped transfers the responsibility of improving water quality to
the consumer. Level I and II water has to be stored by consumers for longer periods of
time, which exposes it to contamination. Other (informal) water supply sources include
self-provisioning and purchasing water from vendors.
* Only three out of five Filipinos get water from formal sources. Only 64% of
Filipinos get water from the Level I, Level I, or Level III systems. A third rely on
self-provisioning while 3% get water from vendors. This means 37% of the
consumers have to devise their own strategies for water services they need. On the
one hand, the rich invest in self-provisioning to ensure good quality and reliable
water, although this has often resulted in adverse environmental impacts in the past.
On the other hand, self-provisioning is the last resort of poor households, forced to
collect water from contaminated sources, store it in containers (such as clay pots,
plastic cans or tins) not regularly cleaned, and drink it without treatment.
* A majority of the poor are excluded from Level III water service. Only a fourth
of the poor get water piped to their homes. The access of the poor to home-piped
water is less than half that of the rich. The poor are three times more likely than the
rich to access water from wells, springs, and conmmunal faucets (i.e., Level I and II
systems). Of the poor with no house connections, more than two-thirds want such
access.
* Rural communities and Mindanao are under-served. Urban households are four
times more likely to be served by level III systems than rural households. More than
Filipino Report Card on Pro-Poor Services xii
Summary
four-in-five households in NCR enjoy access to level III services. Level III service is
least available in Mindanao. A majority of households there get water from
communal faucets (Level II) and point sources (Level I), and a third rely on self-
provisioning. Special attention to improve coverage of safe water service in
Mindanao and rural areas is required.
* Level III service is unable to meet consumer demand. Hence, consumers are
forced to get water from other sources. Among those without access to home-piped
water, two-thirds want to get it, but 95% have not applied for such service. The main
reason cited is unavailability of the service in their area. This calls for provision of
water supply services based on what the clients want, and are willing to pay for.
While government mandates the provision of water based on perceived needs and
affordability of communities, this demand-based approach is worth implementing
further. To this end, the government could benefit from the experience of the World
Bank-assisted LGU Urban Water and Sanitation Project in further refining sector
policies and operational approaches.
* Consumer demand for Level III service should be addressed. The substantial
ummet demand for level III service among consumers and their willingness to pay for
satisfactory service suggest a feasible market for level III service in both urban and
rural locations, across regions, and among different expenditure groups. Thus,
programs on provision of level III service should be promoted regardless of
geographical location or income consideration as long as there is a demand and a
willingness-to-pay for such service. In areas where it is apparent that the poor cannot
afford the full cost of a level III service because of grossly high tariffs due to difficult
water sources and geographical conditions, government needs to formulate an
appropriate policy. Such policy may involve targeted subsidies, institutional
arrangements on water resource management (e.g., inter/intra-LGU trans-basin
diversion, tradable water rights), and the like. Initial policy work on the latter has
been done with World Bank support but more follow-up work as well as
consultations among stakeholders are needed.
* Households with Level III service consume more water than the others. Median
water consumption for level III households is more than the combined consumption
for those with level I and level II access. Higher consumption levels along with
convenience are indicators of greater welfare, and the Report Card confirms that level
III systems are the preferred choice of consumers. Even the poor consume more
water from level III systems, compared to any other water source.
* Water consumption by the poor is unacceptably low. Half of all poor and rural
households consume less than 30 liters per capita per day, which barely meets human
water requirements. Among the poor who buy water from vendors, median
consumption is just 15 liters, a level dangerously close to the survival minimurn.
Thus, inequitable and irregular access to water supply affects poor and rural
households disproportionately. This increases their vulnerability to diseases induced
Filipino Report Card on Pro-Poor Services xiii
Suimmary
by contaminated or inadequate water supply (for example, malaria, dengue fever,
typhoid, gastroenteritis, etc.).
. Water supplied by all sources is considered unsafe for drinking. Almost all
households incur additional expenditure on water treatment and bottled water, which
is often substantially higher than that paid to the water utility. The quality of water
provided in rural areas appears worse than that in urban areas, as seen in the higher
treatment costs in the former. Rural residents spend more than twice their utility bills
on treating water. Urban households spend almost an equal amount on bottled water;
a source in need of improved regulation.
* Low water quality especially hurts the poor. The poor compromise on water
treatment by spending too little on it, partly due to resource constraints and partly due
to lack of hygiene education. This makes them more vulnerable to water-related
diseases.
- The poor pay more, but get less. In general, the share of outlays on water in total
household expenditure varies between 2% and 9% with self-provisioning and vended
water showing the highest shares. On average, poor households allocate
proportionally more of their monthly household expenditure on water, compared to
rich households. Thus, the poor can afford only limited amounts of (low quality)
water, and have very little left-over for treating it. This group should be accorded
priority in new service provision, with a focus on affordability.
* The poor spend the most on low quality vended water. Clients give the lowest
rating to vended water in the Report Card, based on quality and service aspects.
Almost a tenth of Metro Manila residents, many of them poor, get their water from
vendors. The Filipino poor who rely on vended water as their main water source
devote 9% of their household expenditure to buy water. This is the highest share
among all categories and sources, and this population segment should be considered
top priority for targeted interventions.
. The rich are subsidized more than the poor. Past government policies of
prescribing water supply services on the basis of a three-level classification and cost
recovery strategies have resulted in many of the poor accessing level I and level HI
systems, which place the burden of improving water quality on the household. Level
III systems, which often received the largest public investments and subsidies (in
capital and operational costs), serve mainly the non-poor, and mostly in urban areas.
Thus, the inequality in low access of the poor to level III services is compounded by
the subsidy going to systems serving non-poor clients. While the sector strategy
emphasizes full cost recovery for new systems, it is equally important to initiate
measures to remedy inequities in existing systems, especially in terms of providing
the poor with access to the preferred level III services.
Filipino Report Card on Pro-Poor Services xiv
Summary
D. HOUSING
20. The Report Card ascertained citizen assessments of their current housing as well
as the housing assistance services they receive from both public and private sources.
Information on current housing provides the context for better interpreting the
experiences of Filipinos with housing assistance programs.
* The poor are extremely dissatisfied with their housing. Half of the respondents
rate their housing as inadequate. Another one-third consider their housing as
borderline inadequate. In Mindanao and Visayas where poverty is more widespread
than in Luzon, nearly two out of three households regard their housing as inadequate.
Dissatisfaction with housing is higher in rural communities, where more poor
Filipinos live, than in urban areas. However, the urban poor are only somewhat less
satisfied than the rural poor, and extremely dissatisfied compared to their wealthier
urban neighbors.
* Location is linked to satisfaction. Urban residents, especially the poor, are more
satisfied than rural Filipinos with the location of their house relative to their place of
work, public facilities and public services. Because the urban poor value access,
distant, out-of-city relocation is ill-advised. On the other hand, there is a need to
bring jobs, public facilities and public services closer to rural communities, who give
low grades on access. Community upgrading and provision of basic services, like
water and sanitation, will also help reduce the disadvantages that ordinary Filipinos
face to improve their quality of life.
* Land tenure is vital to housing satisfaction. In the Philippines, house ownership (at
78%) is more common than residential land ownership (at 58%). Among the regions,
Mindanao and Visayas, which have the lowest proportion of households owning
residential land, also express the lowest satisfaction with housing. Among the
expenditure groups, the poor have the lowest proportion of households owning
residential land. They are also the least satisfied with their housing. Unsurprisingly,
housing programs, which focus on security of land tenure, like the Community
Mortgage Program, are in high demand in low-income communities, and should be
strengthened.
* The poor are capable of building their own shelter. Although residential land
ownership is lowest among the poor, house ownership is highest, compared to
middle-income and rich households. This reflects the capacity of the poor to build
their own shelter. To improve housing for the poor, government priority should be
security of land tenure and the provision of essential services, leaving people to build
their own houses.
* Access to housing programs is very limited. Out of the five basic services included
in the Report Card, housing assistance offers the lowest access. Only a tenth of the
respondents have ever applied for (both public and private) housing assistance. Of
this number, a third had to do so because of government eviction and relocation
Filipino Report Card on Pro-Poor Services xv
Summary
drives. The three main reasons for not applying for housing assistance are: (i) lack of
awareness on housing programs, and ways to access these (50%); (ii) lack of need
(20%); and (iii) high transaction costs (7%). As a first step, service providers need to
inform the public, particularly non-NCR, rural, and poor households, about ongoing
housing programs. They also need to streamline application procedures, reduce
waiting times and establish responsive complaint resolution mechanisms.
* The private sector hardly participates in housing assistance. Three-fourths of
those who get housing assistance obtain it from the government. A majority of the
rest get it from informal sources like relatives, money lenders, religious institutions,
cooperatives and NGOs. Overall, the private sector appears to be a very minor player
in housing assistance. Options for increasing the flow of private funds into the
housing sector, for example, through the development of a secondary market for
mortgage-backed securities, deserve serious consideration. These will require
accompanying reforms in laws, regulations, supervision and tax aspects.
* Government housing assistance benefits mostly those who need it least. About
95% of the beneficiaries of government housing assistance to-date have been urban
households (majority in NCR). Most government housing assistance has been
captured by rich and middle-income households, with only 21% of the beneficiaries
coming from poor households. Ironically, a larger proportion of NCR, urban and
non-poor households confirmed that they did not require housing assistance.
Government housing assistance should be reconfigured to give more attention to rural
and poor households.
* The poor are excluded from housing associations. SSS, GSIS, and PAG-IBIG
require membership and contributions for at least two years before borrowers qualify
for housing assistance. These eligibility requirements discriminate against the poor
and those employed in the rural and informal sectors. As only 3% of poor households
are members, this accounts for the larger proportion of housing applications by, and
offers to, the non-poor. Even the poor households who are members are often unable
to access assistance because of unrealistic payment requirements and corruption
among lending officials. A separate, transparent and user-friendly housing assistance
window, with more favorable terms, targeted at the poor should be explored.
* Client rejection of housing assistance is high. Applicants reject more than half the
assistance offered to them by housing agencies. One possible explanation is that the
assistance comes too late, as respondents cite long waiting time to be their primary
cause of dissatisfaction with housing services. Rural Filipinos display a higher
rejection rate than urban Filipinos. This may be due to the additional transaction
costs associated with travelling long distances to urban centers to make monthly
payments. Decentralization of housing services and the increased capacity of local
governments through effective training, resource allocation and institutional
reorganization are required.
Filipino Report Card on Pro-Poor Services xvi
Sunmmary
* Low cost rental housing will benefit the poor. The Philippine Constitution calls for
adequate shelter for all, not home ownership for all. Since affordability is a major
issue, alternatives to home ownership for the poor are necessary. Rental housing is an
option, which can improve housing quality and security of tenure, without conferring
ownership. The Rent Control Law should be overhauled to make the rental housing
market work for the poor. The destitute homeless may require special hostels
offering beds and toilet facilities.
E. SUBSIDIZED RICE DISTRIBUTION
21. Rice is an important staple food, particularly in rural and poor communities.
According to the Report Card findings, more than 84% of Filipinos buy rice in the
market, while only 13% produce rice they consume. Even in the rural areas,
approximately 71% of the respondents buy rice. Therefore, any pro-poor government has
to address the food needs of the poor and ensure that affordable rice is available and
accessible to them. This should also be accorded high priority in major social safety net
schemes. The Government of the Philippines has been supplying rice at subsidized prices
through the National Food Authority (NFA), not necessarily to tackle food poverty, but to
ensure price and supply stabilization. The subsidized rice sold by the NFA is referred to
as NFA rice below, while the rest is referred to as non-NFA rice.
* Availability of NFA rice is limited. The Report Card found that the majority of
respondents are aware that the NFA sells subsidized rice. Yet, only 15% of the
respondents buy NFA rice, which is consistent with the NFA participation in the
market.
* The poor self-target NFA rice. Despite NFA's limited participation in the market, it
appears to have disproportionately reached the poor, with 27% of the poor buying
NFA rice, compared with 16% among the middle-income group and 6% among the
rich. However, this does not appear to result from any deliberate government
targeting, but from purchasing decisions of consumers, since anyone can purchase as
much NFA rice as stocks will allow. Targeting of the rice subsidy to the poor should
be an explicit objective of the government rice policy, in addition to supply and price
stabilization. There is merit in delineating the targeted rice subsidy program from the
supply and price stabilization functions.
* NFA rice is low in cost, but inferior in quality. Purchasing decisions are based
largely on price and quality. Given the poor quality of NFA rice, those who can
afford to pay a higher price, buy better quality non-NFA rice; while the poor, who do
not have adequate income, resort to lower priced NFA rice. The non-poor appear to
buy NFA rice mostly for domestic helpers and pets. The quality of NFA rice could
be improved, in part, through better management of storage (including stock rotation)
at minimum additional cost.
* The non-poor benefit more from rice subsidy. While proportionately more poor
people buy NFA rice, the absolute number of the non-poor who buy NFA rice is not
Filipino Report Card on Pro-Poor Services xvii
Summary
much different from the absolute number of the poor who do so. Because the middle-
income and rich households purchase more NFA rice than the poor, the non-poor
enjoy a bigger subsidy. This appears to be a misallocation of scarce resources of a
government concerned with improving basic services for the poor. To this end, the
government should consider targeting rice support to the poor, rather than providing a
general rice subsidy for all.
* Filipinos recommend geographical targeting to the poor. Targeting rice subsidies
to the poor has been on the government agenda for the past few years, which is
validated by the survey results. A majority of respondents recommend geographic
targeting, by locating special stores selling NFA rice in poor areas, as the most
effective targeting mechanism. There is less support for provision of identification
(ID) cards and food stamps due to concerns relating to potential corruption, high costs
of administration, and implied limits.
* The non-poor patronize ERAP stores more. Client feedback on the enhanced retail
access to the poor (ERAP) stores, which are supposed to be located in areas where the
poor live, is not encouraging. The Report Card found that that the middle-income and
the rich are more aware of ERAP stores, intended to provide the poor with access to
basic commodities at subsidized prices. Moreover, the survey showed that more
middle-income and rich households patronize the ERAP stores, than the poor.
• Mindanao is excluded. Among all the regions, Mindanao has the highest proportion
of households to whom no NFA rice is available. It also has the least ERAP stores in
the country. As a first step, more ERAP stores should be located in disadvantaged
areas, especially Mindanao, as part of the Mindanao Peace and Development Plan, to
enable the poor to avail of low-priced basic commodities, including NFA rice.
. Government tests geographical targeting plus ID passbooks. Government is
proposing a Targeted Low-Priced Rice Distribution Pilot Program to make available
low-priced, and good quality, NFA rice to poor families. This is expected to pave the
way for discontinuing the general rice subsidy available to all. The pilot program
uses geographic targeting but further limits beneficiaries and purchase of rice through
the use of passbooks, a form of ID cards. Combining geographic targeting plus ID
cards may reduce leakage more significantly than the application of either one alone.
22. Several recommendations for application in the pilot program can be made, based
on the Report Card findings:
* Review the subsidy level. The NFA pilot program offers rice at the same price as
the generally available NFA rice. However, a key survey finding is that the amount
of NFA rice subsidy is modest and makes marginal difference for the poor.
Therefore, NFA may wish to consider adjusting the price upwards for generally
accessible stocks. The savings obtained from adjusting the price of generally
accessible stocks could then be redirected to increase coverage and amount of subsidy
to the poor in the pilot program.
Filipino Report Card on Pro-Poor Services xviii
Summary
* Differentiate price and quality. According to the Report Card, respondents were
dissatisfied with the quality, smell, taste, and color of NFA rice. In relation to the
targeted program, NFA should take steps to differentiate prices between different
quality of rice sold, improving consistency of stock and eliminating the need to mix
stocks of various qualities.
* Reconsider the entitlement level. The pilot program limits entitlement of rice
allocation per person. However, respondents are least supportive of food stamps to
buy subsidized rice, due to the implied limits to buy rice. To this end, NFA may wish
to review the entitlement level, following the pilot phase.
F. LINGAP PARA sa MAHIHIRAP PROGRAM
23. The Lingap Para sa Mahihirap (or Caring for the Poor) Program was launched as
the flagship poverty reduction program of the Estrada Administration. It aims to reduce
the number of poor Filipinos from 24 million in 1997 to 17 million by 2004.18 Initially,
16,100 poor families were identified to receive assistance; they were selected as the 100
poorest families in each of the 78 provinces and 83 cities. Government support under the
Program was channeled to the poor families in the form of a package of assistance on
(i) food, nutrition and medical assistance; (ii) price support for rice and corn;
(iii) protective services for children and youth; (iv) rural waterworks; (v) socialized
housing; and (vi) livelihood development.
* The poor and rural residents are less aware of the Lingap Program. About two-
thirds of the respondents have heard of the Lingap Program. This is impressive,
given its short history. However, rural residents are much less informed about the
Program, compared to their urban counterparts. Awareness is lowest among the poor,
as compared to the middle-income group and the rich. It is unfortunate that the
neediest groups, the poor and rural residents, are least informed about this poverty
alleviation program. A targeted infornation campaign through television and radio,
covering such aspects as program benefits, eligibility criteria and how clients can
access program benefits is required.
* Purse strings are controlled by legislators. About two-thirds of the Lingap funds
are to be disbursed in each constituency with the approval of the members of the
Senate and House of Representatives from the constituency. Further, the legislators
are represented in the Program Advisory Boards in each of the implementing
agencies. This subjects the Program to the pressures of political patronage. This is
the reason why the Report Card looks into poverty targeting.
* The non-poor barangays benefit more. The proportion of households who
responded that their barangay is listed for coverage under the Lingap Program is
18 This target was subsequently revised to bring down the poverty incidence from 31.8% in 1997 to 25-28%
by 2004.
Filipino Report Card on Pro-Poor Services xix
Summary
almost the same for the poor, middle-income and rich groups. In fact, the number of
poor households who indicated that their barangay is included for coverage is less
than half of that of the non-poor - middle income plus rich households.
* The non-poor households benefit more. While 16% of the poor count themselves
as eligible to receive benefits from the Lingap Program, so do 16% of the middle-
income group and 11% of the rich. This reveals ineffective targeting. Worse, the
non-poor who were listed as eligible to receive benefits outnumber the poor by a ratio
of almost two-to-one.
* The poor are less connected to legislators. A fourth of the respondents say that
they know a Congressman or a Senator who will recommend their household to be
included in the Lingap Program. The proportion of poor households having such
connections is lowest (19%), as compared with the middle-income group (23%) and
the rich (27%). This puts the poor at a disadvantage.
* Lingap Program should be overhauled or terminated. At its inception, a majority
of Filipinos believed that the Lingap Program would have no impact on poverty
reduction. A few even predicted that it would make things worse. After the first year
of implementation, the bulk of the benefits of the Lingap Program appear to be going
to the non-poor. The mechanisms for beneficiary selection seem to facilitate this
leakage. To this end, the Program requires a major overhaul, or termination.
* Evaluate and draw lessons from the Lingap Program. A detailed evaluation of the
Lingap Program and possibly other recent Poverty Alleviation Funds should be
undertaken to draw out lessons for future poverty reduction interventions. Some
preliminary lessons/recommendations can be made based on the Report Card
findings, which need to be confirmed through the detailed evaluation(s). These are:
. Sequence and limit the number of activities under future narrowly-targeted
poverty reduction programs to a limited few, say, four to six that are of the
highest priority to the poor and are distinct from the regular (ongoing) programs
and activities of the implementing national government agencies. The activities
selected should be amenable to narrow targeting. It is futile to try to enforce strict
targeting of programs to poor households that have a broader community focus
and are often of the same nature as other regular government services.
> Involvement of the political establishment in the selection of beneficiaries, and in
the control and allocation of program funds may compound the problem of
leakages. However, political commitment to, and legislators' support for, poverty
reduction are intertwined with control over the resources for poverty alleviation
by members of Congress and Senate. The challenge is to reduce and eventually
eliminate political intervention in the allocation of poverty reduction funds at the
grassroots without losing the legislators' support for appropriation of these funds.
' Rule-based targeting criteria with little room for discretion and strict enforcement
of the application of the criteria may reduce major leakages. However, the
Filipino Report Card on Pro-Poor Services xx
Summary
capacity of national government agencies to implement such targeting is weak
and needs to be strengthened in the medium-term. In the mean time, geographic
targeting may be a viable option, albeit with increased attention to the
concentrations of the poor and the intensity of their poverty.
Decentralization and localization of beneficiary identification and resource
allocation under the program, with the involvement of LGUs, Baran gay Captains
and civil society organizations should be adopted, because these grassroots
organizations are likely to be better informed and more adept at tailoring the
program components to the needs and priorities of the poor groups. Also, this
may enhance the transparency of operations and accountability to clients.
Monitoring should be an integral part of program management to identify
problems and constraints facing program implementation. This should be the
basis for prompt corrective action to resolve problems and maintain the pace and
course of implementation. It is important to obtain feedback from the ultimate
clients -- the poor -- on such aspects as suitability of the interventions, access, use,
satisfaction, leakages and complaints at different stages of implementation of the
program.
Periodic auditing of the results of the program should be undertaken by
independent agencies such as the Commission on Audit (COA) and credible
NGOs. The audit findings should be made public and should be taken into
account in the design of future public interventions on poverty reduction.
3. INSTITUTIONALIZATION OF THE REPORT CARD
A. Why Institutionalize the Report Card?
24. The Filipino Report Card on Pro-Poor Services provides client assessments of the
performance of selected government services based on citizens' experiences. It is
expected that the service providers in government, private sector and civil society would
take into consideration the Report Card findings in adjusting their programs to improve
service delivery. However, many past assessments did not have a lasting impact on
service delivery because they were often one-shot exercises with no effective means to
follow through. It is necessary to implement the Report Card mechanism periodically in
order to gauge the improvements in service delivery from a "bottom-up" perspective.
The incentive to respond with concrete improvements would be greater, if service
providers know they will be tracked again. Thus, the Report Card mechanism should be
institutionalized as an ongoing process to be repeated periodically (say, at 12- to 18-
month intervals).
B. Global Experiences with Report Cards
25. While citizen report cards are new to most governments and their agencies, these
are now being used as a way to assess the performance of public agencies in the delivery
of services in Canada, Denmark, Ghana, India, Sweden, Ukraine, the United Kingdom,
and the United States. It is instructive to review the institutional arrangements for report
Filipino Report Card on Pro-Poor Services xxi
Summary
cards in these countries in exploring options for institutionalizing the Report Card in the
Philippines.
26. The institutional arrangements for the report cards range from independent non-
government policy research institutions, central statistical agencies of government,
government service provider agencies, and federal coordinating agencies. These may be
categorized under three main types (models) of institutional arrangements for preparation
of the report cards: (i) by independent civil society organization; (ii) by government
service provider agency; and (iii) by government coordinating agency.
27. Under the first model, the initiative for preparing the report card comes from a
civil society organization - often a policy research and advocacy institute. A primary
example of this is the Public Affairs Centre in Bangalore, Karnataka State, India.'9 It is
usually financed by public contributions and grants from charitable organizations,
international foundations and donors. The advantage of the first model is that it is totally
independent. On the other hand, its links with service providers and public
coordinating/budget agencies are tenuous. Service providers may resist the results and/or
even undermine the findings. Also, the sustainability of the report card exercise in the
medium and long-term is doubtful as regular funding for it is uncertain, and the rigorous
technical requirements may be burdensome.
28. The second model is characterized by a government service provider agency
initiating the preparation of the report card, with the actual survey and draft report
preparation often contracted out to a private or civil society organization. The draft
report is vetted by the agency, finalized and usually disseminated to the public. The
focus of the report card may be confined to a single program (service) or a facet relevant
to a program administered by the agency. Examples of countries using this model
include Canada and the United Kingdom. A major strength of this model is the
ownership of the exercise by the public service provider agency. Preparation of the
report card by an outside firm brings some degree of independence to the exercise. The
preliminary results are available to the agency and its views and feedback are included in
the final report.
29. The same factors may become weaknesses in the model when viewed from a
different perspective. As the report card preparation is sponsored, and its implementation
overseen, by the service provider, the public at large, government coordinating agencies
and legislators may question the independence and objectivity of the findings. Its links
with the decision makers on public expenditures (budgets) is weak. In addition, the
19 The work by the Public Affairs Centre is truly exceptional and is largely the result of the vision and
dynamism of its Chairman. The Centre is a non-profit and professionally comnpetent organization, which is
well recognized both within the country and outside. Its credibility with government and the public is high.
The report card findings are taken seriously by a wide range of stakeholders. This is a testimony to the
stature of the Chairman. As a result of his remarkable work at the state and city level, the Government of
India has asked the Centre to conduct a millennial report card on public services for the entire country. The
lirnitations of this model relate to the difficulties in replicating this unique situation.
Filipino Report Card on Pro-Poor Services xxii
Summary
information collected is usually tailored to meet the requirements of the public agency,
and is not packaged for the consumption of and advocacy by most citizen groups. This
compromises the public accountability outcome of the report card.
30. Typical arrangements under the third model involve a government coordinating
agency engaging an independent organization to design and prepare the report card in
consultation with (but independent of) the public service provider agencies. The
experience in the United States is instructive in this context. The Government
Performance and Results Act of 1993 requires the executive branch of the federal
government to report to Congress (legislative branch) on the performance of various
government agencies and the results achieved. The General Services Administration
(GSA), a government coordination agency, was instructed to devise a mechanism for
assessing performance of the federal agencies.
31. The American Customer Satisfaction Index (ACSI) developed jointly by the
University of Michigan Business School (an academic institution), American Society for
Quality (a professional society), and Arthur Andersen (a private consulting firm), was
selected as the tool for assessing the performance of the federal agencies.20 The GSA
engaged the consortium21 to undertake the 1999 Customer Satisfaction Survey of Federal
Agencies in the United States. The survey focused on 29 federal agencies which included
most of the high impact agencies that dealt with 90% of the federal government's
customers. Service provision by public agencies was assessed using the private sector as
a benchmark. The results of the survey were presented to Congress. Thus, a link
between agency performance, as measured by a report card based on client feedback, and
the budget allocations to the agencies has been established.
32. Among the three models discussed above, the third model is the most
comprehensive both in terms of product and process. A mandate for undertaking the
report card was established through legislation and resources were allocated for this
purpose. An independent and credible consortium of institutions was recruited to prepare
the report card. A well-established methodology was used to assess the performance of
federal agencies. The consultation process with public service providers was appropriate,
but not dominant. Most important, the report card findings (results) were fed back not
only to the service providing agencies and the public but also into the budget (public
expenditure) allocation process of the Congress.
C. Institutionalizing the Report Card in the Philippines
33. Discussions with key local stakeholders indicate that the third model is the most
desirable one to consider for adoption in the Philippines, with appropriate modifications.
In fact, the pilot round of the Filipino Report Card incorporated many of the positive
20 The independent consortium developed the ACSI in 1994 as an economic indicator of satisfaction with
quality, and has since been used for assessing client satisfaction with the services provided by major private
companies.
21 The consortium comprises the University of Michigan Business School, American Society for Quality
and Arthur Andersen.
Filipino Report Card on Pro-Poor Services xxiii
Summary
attributes of the third model.22 Institutionalizing the Report Card tool in a government
oversight agency that feeds the results directly into the public expenditure allocation
process is highly advantageous as it ties the budget allocations not only to past
performance, but also to the constraints that remain to be tackled for improving future
performance. Thus, the "power of the purse" could be used to correct deficiencies,
ameliorate constraints and improve performance. This should prove to be an effective
means for improving the delivery of public services and enhancing the accountability of
public agencies. It also provides an opportunity for citizens to get involved in the process
of allocating public resources to address their basic needs. This is particularly beneficial
to the poor, given their relatively weak voice as purchasers and users of public services.
34. In recent years, the Department of Budget and Management (DBM) of the
Government of the Philippines has initiated a program on development of performance-
based indicators for public agencies to assess their effectiveness, and guide future budget
allocations. Three key areas proposed for measurement of perfornance are: (i) outputs;
(ii) processes; and (iii) citizen feedback. To this end, the DBM has expressed a strong
interest in institutionalizing the Report Card tool, piloted by the World Bank and the
SWS, as a way of obtaining regular citizen feedback on key public services.23
35. The government's new initiative on performance-based budgeting provides an
opportunity to channel user feedback into decisions relating to public spending. The
DBM can increase public accountability by seeking citizen feedback on major programs
and expenditures of government agencies and by using the results as inputs into the
budget allocation process. It would be a strong complement to and a valuable crosscheck
on the agency reports on outputs/results as well as those on processes. It would create a
comprehensive performance monitoring system by augmenting the DBM's ongoing
output and process monitoring efforts with client feedback.
36. The idea of institutionalizing the Report Card in the DBM to assess citizen
satisfaction with public services on a regular basis is compelling. Both the DBM and the
Bank agree that instead of reinventing the wheel, the Report Card tool, which has
recently been tested in the context of five public services in the Philippines, can be
applied with appropriate modifications to cover a broader range of public services and
public sector agencies that are engaged in service delivery to Filipinos, including specific
target groups such as the poor. Preliminary discussions indicate implicit support for this
approach from NEDA.
22 For example, obtaining client feedback on public services, which is at the core of the Filipino Report
Card, has strong support from the highest levels of the Government of the Philippines as supported by the
quotation from President Glora Macapagal-Arroyo at the beginning of the Executive Summary. The SWS,
an independent and credible institution with a good reputation, was engaged to undertake the design and
execution of the Report Card survey instrument. A consultative/participatory process is adopted in
designing the survey, involving a wide spectrum of stakeholders including govermnent service providers.
Service provision by public agencies was assessed using the private sector as a benchmark. The Report
Card findings are (proposed to be) shared with the service providing agencies and the public, as well as fed
into the budget allocation process through the DBM.
23 The Report Card was piloted in close collaboration with NEDA, which has taken the leadership in
coordinating the inputs from government service providers. Also, NEDA sponsored and chaired the
consultation workshops in June 2000 and provided feedback on the Report Card findings.
Filipino Report Card on Pro-Poor Services xxiv
Sumnary
37. Implementation of the Report Card survey, analysis and report preparation could
be contracted out by the DBM to a credible and independent civil society organization
with substantial expertise and experience in such activities. An advisory panel
comprising representatives of service providers, key government oversight agencies,
private sector, civil society organizations including sectoral (interest) groups and
prominent experts, should be convened to advise and guide the Report Card exercise and
its integration with the budgetary processes. It may be worth exploring the feasibility of
utilizing the multi-stakeholder advisory panel on the budget set up by the govemment in
mid-2000 for this purpose, with appropriate augmentation of its membership.24
D. Improving the Report Card25
38. Continued assessments of the concepts and measures used in the pilot Report
Card should be undertaken to further improve the tool. While the first round of the
Report Card spread the net wide and covered as many facets of service delivery as
possible within the budget, the scope of future Report Cards should be limited to a few
principal performance indicators that significantly overlap with those (to be) used by the
DBM in monitoring outputs and processes. To this end, the citizen feedback will be
useful for triangulating and complimenting the findings on outputs and processes. In
addition, limiting the scope to a few principal and common perforrnance indicators
should bring about considerable savings, which should make the Report Card more cost-
effective and sustainable. This will also ensure that the Report Card does not duplicate
what other existing surveys and assessments are already tracking in the Philippines.
Finally, this will help focus the attention of public service providers and key policy
makers on critical corrective actions for improving service delivery to the poor.
E. Last Word
39. It is recognized that no single sample of 1,200 households, no matter how
carefully selected and representative, can fully represent a country as large and diverse as
the Philippines. Nevertheless, the Report Card does provide valuable feedback from a
wide spectrum of Filipinos on pro-poor services. The client assessments have been
collected by means of sound and well-tested survey techniques that meet international
standards. The results are subjected to rigorous standard error analysis, which shows the
findings to be statistically significant. Admittedly, the Report Card tool is not perfect at
entry. Many of the concepts and measures used in this pilot phase will undergo iterative
refinements as the Report Card is repeated and institutionalized. But what matters most
is that the Report Card provides a channel for citizens to voice their concems and
24 The advisory panel on the budget is the Budget Dialogue Group. It is expected that membership in the
core group will be expanded by increasing civil society participation. In addition, multi-stakeholder
working groups will be set up to support the core group.
25 The DBM has agreed to modify and expand on the pilot Report Card exercise for institutionalization of
client feedback on key public services. To this end, the World Bank will provide the DBM with one-time
grant assistance to: (i) establish concrete linkages between the Report Card tool and the proposed
performance indicator system of the DBM; and (ii) conduct the second round of the Report Card using an
upgraded instrument.
Filipino Report Card on Pro-Poor Services xxv
Summary
priorities, and an avenue for service providers and policy makers to directly listen to their
clients.
40. Much can be learned already from the information in this Report Card about the
potential of this tool to improve public service delivery and accountability to clients.26
Recognizing this, a number of Report Card initiatives are being launched in the
Philippines. These include the preparation of a Report Card on Municipal Services in the
seventeen municipalities in Metro Manila.27 Thus, the Report Card tool, which is
admittedly imperfect at entry, is being improved through application in a variety of
settings in the Philippines.
26 In the Philippines, a great deal of time and effort is spent on planning and designing public programs.
There is need for a more balanced approach that pays equal attention to the task of adapting and responding
to problems and opportunities that arise on the ground as the plans get translated into action. The Report
Card is an example of a tool that can help remedy this shortcoming through the generation and analysis of
timely citizen feedback.
27 During the World Bank organized intemational workshop on Voices and Choices at the Macro Level:
Participation in Country-Owned Poverty Reduction Strategies, Washington, D.C., April 3-5, 2001, senior
government representatives from seven (out of twelve) developing countries indicated considerable interest
in preparing client report cards, based on the Philippine experience, in their countries.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER I. INTRODUCTION
1. WHAT IS THE REPORT CARD?
1. The Report Card is an important follow-up to the World Bank's (the Bank)
Philippines Poverty Assessment.' It complements the expert analyses and findings in the
Poverty Assessment with client assessments on pro-poor services in five key sectors --
health care, elementary education, water supply, housing and subsidized rice
distribution.2 It contains information on users' awareness, access, use and satisfaction3
with publicly provided pro-poor services. The Report Card identifies the key constraints
the poor face in accessing public services, their views about the quality and adequacy of
services, and the treatment they receive in their interactions with service providers,
especially government officials. It offers several recommendations on sector and sub-
sector policies, strategies and programs to address the constraints and improve service
delivery, especially to the poor and hitherto under-served areas and groups.
2. The Report Card is based on a national client satisfaction survey undertaken by
the Bank in collaboration with the Social Weather Stations (SWS), a premier survey
research organization in the Philippines that is independent, non-partisan and credible.4
The survey was implemented from March 26 to April 17, 2000. It covered 1,200
households, distributed in the four broad regions: National Capital Region (NCR);
Balance Luzon,5 Visayas; and, Mindanao -- in proportion to their population. In keeping
' Philippines Poverty Assessment, The World Bank, Washington, D.C., June 14, 2000.
2 These five sectors are key elements of the government's poverty reduction efforts under the Minimum
Basic Needs (MBN) approaches, which include the Social Reform Agenda of the Ramos administration
and the flagship Lingap Para sa Mahihirap Program of the Estrada Administration. Although the first
round of this Report Card does not cover every pro-poor sector and program, it helps track the services that
are intended to fulfill the basic needs of food, water, shelter, health, and literacy (education).
3 The responses on satisfaction are captured on a five-point structured scale to facilitate compilation of
overall net satisfaction scores. The structured responses and the weights attached to them are: very
satisfied accorded a score of plus two (2); somewhat satisfied accorded a score of plus one (1); undecided
accorded a score of (0); somewhat dissatisfied accorded a score of minus one (-1); and very dissatisfied a
score of minus two (-2). The weighting helps distinguish the variations in the degree of satisfaction and
dissatisfaction. The value of the aggregate net satisfaction score ranges from plus two (2), or all
households very satisfied; to a low of minus two (-2) or all households very dissatisfied.
4 If service providers or program implementers had undertaken the client survey themselves, the
independence of the results could be questioned by oversight agencies, legislators and civil society. On the
other hand, if advocacy NGOs were engaged to conduct the survey, service providers could question their
"agenda." In contrast, the SWS is recognized and respected by many as an independent, professional,
credible, and non-partisan organization. This was a critical factor in its selection to undertake the survey.
5Rest of Luzon excluding NCR.
Filipino Report Card on Pro-Poor Services 2
Chapter I: Introduction
with global best practice, customer satisfaction with public services in the Philippines is
assessed using the results for the services provided by the private sector as benchmarks.6
2. WHY PREPARE A REPORT CARD?
3. There is a growing concern in the Philippines regarding the performance and
accountability of public agencies that deliver services, especially to the poor. Most
accountability mechanisms for public agencies focus on inputs (e.g., number of
personnel, facilities, and expenditures) and occasionally on broad outcome indicators
such as literacy and mortality rates. Beyond this arithmetic, little is known about the
QUALITY of services delivered by the State. It is therefore difficult to identify specific
areas for improvement in order to make public services more responsive to and effective
in meeting the needs of the users.
4. There are a number of evaluations of pro-poor programs in the Philippines,
undertaken by service providers and experts. The Report Card originated from an
inventory of these evaluations and assessments of poverty alleviation programs in the
country. The inventory yielded significant information but pointed to a glaring gap --
very few of the evaluations and assessments were done from the citizen perspective. As a
follow-up to the inventory, and on the advice of Filipino experts, the Report Card
initiative was launched to undertake a "bottom-up" assessment of pro-poor services. The
initiative is considered important and timely by experts, service providers, and civil
society representatives.7
5. A further issue emerging from the inventory of evaluation of poverty alleviation
programs is that they often identify program-specific problems and issues with little
connection to sectoral and cross-sectoral dimensions. In addition to providing the citizen
perspectives, the Report Card helps to pull together the myriad individual problems
facing the various programs into common sectoral issues, by drawing attention to the
worst problems, and good practices, in the five selected sectors.8 By ranking and
quantifying issues, it facilitates the focus of attention on those concerns that trouble the
clients most and can trigger public pressure and collective action.9
6. To be effective, traditional public accountability systems need to be strengthened
and reinforced through adoption of innovative approaches that involve public
participation. Those at the receiving end -- users or Filipino citizens -- are well placed to
provide systematic feedback to service providers and policy makers on the results of
6 For example, see Federal Agencies Government-wide Customer Satisfaction Report for the General
Services Administration, December 1999, University of Michigan Business School, American Society for
Quality, and Arthur Anderson.
7 The following quote from a service provider representative is a good illustration of this: "We have always
been evaluated by outside consultants. It is high time that we are evaluated by our clients. After all, who
knows us better." Comnment by a government representative at the stakeholder workshop arranged to
discuss the preliminary findings of the Report Card, Manila, June 13, 2000.
8 Other important service sectors and programs should be added to the Report Card survey as it is repeated
and institutionalized.
9 Quantification and rankings in the Report Card are arguably superior to anecdotes in focusing the
attention of policy makers, service providers and the public at large.
Filipino Report Card on Pro-Poor Services 3
Chapter IL Introduction
govermment actions that are intended to benefit them. While most users may not be able
to comment on complex technical matters, they are eminently qualified -- EXPERTS --
on whether the public services meet their expectations, whether specific aspects are
satisfactory or unsatisfactory, and whether the concerned agencies are responsive,
accountable, and reliable. This does not imply that everything a user says is necessarily
correct. But development experience reveals that ignoring feedback may be more costly
to an agency, than listening. If users, for examnple, are misinforned or have
misunderstood some aspects of a program, then the agency needs to better inform and
educate them. Even this cannot be done without first getting user feedback.
7. The Report Card is a timely initiative, which should help translate the renewed
commitment of Filipinos to a democratic, transparent and accountable State that is
responsive to the needs of the people, especially the poor.10 It builds upon the previous
Administration's commitment to "treat each citizen as a customer in much the same way
as the best private companies treat their clients.''l This commitment is reiterated by
President Gloria Macapagal-Arroyo, who required her Cabinet members to sign a Pledge
to be accountable to eleven service standards, including Constituency (client) Feedback
along the following:
"I believe in listening to and learning from those whom I serve. I
will ensure that my organization creates and respects genuine mechanisms
for regular feedback from our citizen-customers, and subsequently uses
this feedback to render better service to them. "
8. This shift to think of Filipinos as customers or clients rather than beneficiaries,
requires that their "voices" count in the design, delivery and assessment of public
services. Private firms operating in a competitive environment make use of this approach
in many countries. In light of the information gathered through client surveys, private
firmns redesign their products to meet customer needs and enhance customer loyalty. User
feedback is especially important for government service providing agencies as they often
operate as monopolies or oligopolies where people (particularly, poor people) may have
few viable and affordable alternatives. For example, aspects such as quality of services,
timeliness of service delivery and responsiveness of agency personnel may leave much to
be desired, but market pressures (through competition in service provision at comparable
prices) are missing to correct the deficiencies. Client feedback is a much needed
corrective in this setting, which can be used either by reforrn minded champions in the
government and/or as a trigger for public pressure to improve performance. A similar
client-focused approach is being adopted by government agencies in a number of
countries.
10 Actions taken, or not taken, by previous Administrations will no doubt have a bearing on the quantity and
quality of services being assessed by the Report Card, but apportioning credit or blame is not attempted
here. At the same time, a responsive government is expected to set in motion changes for the better. It is
with this expectation - to use the State machinery to improve performance and accountability of pro-poor
services - that the Report Card findings are presented.
" Former President Joseph Estrada made this commitment in the context of delivery of essential services.
See Intouch, a newsletter of the World Bank Country Office Manila, Volume 5, Number 2, March 2000.
Filipino Report Card on Pro-Poor Services 4
Chapter 1: Introduction
9. While user report cards and client surveys are new to most governnents and their
agencies, these are now being used as one way to assess performance of public agencies
in some countries including Canada, Denmark, Ghana, India, Sweden, United Kingdom,
United States, and Uzbekistan. For example, a recent client survey in Karnataka State,"
India, covered access to, use of and satisfaction with primary education, basic health care,
safe water, and food distribution, disaggregated by income and location similar to the
Report Card in the Philippines. In this case, and others, quantifying and grading different
dimensions of public services from the perspective of users helped government agencies
measure their performance, understand the factors that contribute to it, and respond better
to the needs and expectations of the people (clients) they serve.
3. WHAT DOES THE REPORT CARD PRESENT?
10. The Report Card presents user perspectives on pro-poor services that are not
always captured in traditional evaluations by experts and in the routine reports of
agencies providing the services. The client assessments bring forth valuable insights into
such critical dimensions as awareness, availability, and affordability of pro-poor services
from different service providers (e.g., government, private sector and other sources).
These service dimensions are presented from the perspectives of different population
groups, differentiated by geographic region, rural and urban residence, and level of
household expenditure. These should be key inputs in the design and improvement of
effective service delivery programs. They should be seen as complementing the findings
of expert evaluations and agency reports.
11. The insights derived from the Report Card should be helpful in understanding the
degree to which the pro-poor services are reaching the target groups, the extent of
leakages, and factors that seem to contribute to such misdirection of resources and
services. They help identify the physical availability, quality and cost factors that
constrain the access to and use of the services by the poor and possible means to rectify
the situation. The latter include suggestions by the respondents on the types of programs
that might enhance service delivery to and use by the poor.'3 Also, the Report Card
results help test some of the policy conclusions in the Philippines Poverty Assessment
such as abolishmnent of a general rice subsidy and weak performance of the Lingap Para
sa Mahihirap Program from the clients' view. Thus, it complements the Bank's
analytical work from a "bottom-up" perspective.
12. The Report Card is a snapshot of the situation prevailing during March - April
2000. On most aspects, it does not indicate whether access to services has been
expanding, quality and quantity have been improving, and how client satisfaction with
the services has been changing over time.'4 Such information could be obtained through
12 A Citizen's Report Card on Karnataka State's Governance, Samuel Paul and Gopakumar K, Public
Affairs Center, Bangalore, India, 2001.
13 Each of the sector modules in the survey questionnaire includes some questions with structured responses
seeking client views on alternative pro-poor service delivery programs as well as queries with open-ended
responses that elicited respondents own suggestions on suitable programs.
14 An exception is the education module of the Report Card where comparisons are made between present
and past elementary schools.
Filipino Report Card on Pro-Poor Services 5
Chapter I: Introduction
periodic (say, at 12 to 18-month intervals)15 Report Card surveys. Also, the client
perspectives from the Report Card survey need to be augmented with expert assessments
and agency reports to obtain a comprehensive picture of the strengths and weaknesses of
service provision to various groups. To this end, secondary data has been used as a
complement and cross-check, wherever available.
13. There may be subjectivity and variability in user responses to the questions on
service quality in the Report Card survey. On subjectivity, it is important to understand
that client responses are based on their experiences and reflect their actions on the use of
services, weighing both costs and benefits. One way of addressing the variability in user
responses is to group the responses by the socio-economic characteristics of respondents.
The Report Card analyzed the responses, among others, by expenditure groups (e.g.,
poor, middle-income and rich). Another is to track changes in client assessments over
time of different socio-economic groups to see whether the variability across the groups
is consistent over time. This should be facilitated through the institutionalization of the
Report Card.16
14. Undoubtedly, many of the concepts and measures used in this pilot Report Card
will require further refinement.'7 It is hoped that close scrutiny and utilization of the
results will lead to progressively better measurement of client satisfaction in the coming
years.'8 Yet, much can be learned already from the informnation in this Report Card about
the potential of this tool to improve public service delivery and accountability to clients."9
Recognizing this, a number of Report Card initiatives are being launched in the
Philippines. These include the preparation of a Report Card on Municipal Services in the
seventeen municipalities in Metro Manila, undertaken the by the Development Academy
of the Philippines, with assistance from the Asian Development Bank. Thus, the Report
Card tool, which is admittedly imperfect at entry, is being improved through application
in a variety of settings in the Philippines.
4. HOW ARE THE POOR IDENTIFIED20
15. Two poverty classifications are used in the Report Card.21 The first is based on
self- rating/classification of the status of the households as poor, borderline and not-poor.
15 See also Chapter VIII on Institutionalization of the Report Card.
16 See also Chapter VIII.
17 For example, the Report Card survey questionnaire was found to require greater clarity in some areas and
abridgement in still others.
18 In addition, client satisfaction measures developed in other countries, such as the American Customer
Satisfaction Index (ACSI), could be drawn upon.
19 In the Philippines, a great deal of time and effort is spent on planning and designing public programs.
There is need for a more balanced approach that pays equal attention to the task of adapting and responding
to problems and opportunities that arise on the ground as the plans get translated into action. The Report
Card is an example of a tool that can help remedy this shortcoming through the generation and analysis of
timely citizen feedback.
20 See Appendix I for details.
21 A third poverty classification of households into A, B, C, D, and E, based on the enumerator's
observation and assessment of housing and living conditions was also included in the Report Card. This
has been a useful measure for market research in the Philippines.
Filipino Report Card on Pro-Poor Services 6
Chapter 1: Introduction
This is a bottom-up assessment of the status of the household by the respondent(s). The
self-rated poverty (SRP) concept has been used by the SWS for the past 15 years in its
quarterly surveys. It was found to be a valuable independent instrument to capture
people's assessment of their own status/well-being. About 60% of the sample
households rated themselves to be SRP poor, 28% as SRP borderline and 12% as SRP
not-poor.22
16. The second poverty classification is based on household expenditure.23
Households with expenditures in the bottom three expenditure deciles (bottom 30%) are
classified as poor; those with expenditures in the fourth to sixth deciles (middle 30%) as
middle-income; and those with expenditures falling in the top four expenditure deciles
(top 40%) as rich.24 The self-rated and expenditure poverty measures appear to be
directly and closely inter-related. To this end, the expenditure poverty classification is
used in the Report Card as the primary poverty measure. This helps link together the
quantitative poverty information from the expenditure module of the Annual Poverty
Indicators Survey (APIS) with client feedback on pro-poor services.
5. HOW PARTICIPATORY IS THE REPORT CARD?
17. Planning the Report Card survey began with consultations with key stakeholder
groups in government, private sector, civil society, and selected academic institutions in
the Philippines. The survey questionnaire was drafted jointly by SWS and Bank staff. It
was shared widely with various stakeholders in the Philippines, sector specialists in the
Bank and selected international experts. This was followed by a field test. The feedback
from the various groups was incorporated, as appropriate, in the finalization of the
questionnaire. Thus, the inputs of different stakeholders were actively solicited and
incorporated in the design of the questionnaire.
18. After completion of the fieldwork in April 2000, preliminary data tables were
prepared by the SWS. The preliminary findings drawing upon these tables were
presented to stakeholder representatives in regional workshops in Manila, Clark, and
Cebu during June 2000. The participants in the workshops in Manila included
government officials from coordinating agencies and service providers,25 local
22 The proportion of households rating themselves to be poor (self-rated poverty) fluctuated around 60%
between February 1998 and April 2000 (range of 57% to 65%).
23 The Report Card obtained information on household expenditures by including the expenditure module
from the Annual Poverty Indicators Survey.
24 An altemative labeling of the groups was suggested by the SWS: households in the bottom three
expenditure deciles (or bottom 30%) to be labeled very poor, in middle 30% as somewhat poor, and those
in top 40% as middle-income and rich.
25 For example, DBM, DILG, NAPC, NEDA among oversight agencies, and DOH, DECS, DSWD,
LWUA, MWSS, NHA, SSS, HUDCC, and NFA among service providers.
Filipino Report Card on Pro-Poor Services 7
Chapter 1: Introduction
government unts26 private service providers,27 civil society organizations including
NGOs,28 and donors (e.g., ADB,29 UNDP and UNICEF).
19. The participants in the workshops at Cebu and Clark included government
officials,30 private sector (e.g., private schools), and civil society organizations. The
reactions of these participants were grounded on practical experience at the grassroots
and complemented the overall (macro-level) perspectives presented by the participants in
the Manila workshops. They identified a number of nuances that were helpful in
explaining the apparent discrepancies between the Report Card results and sector level
data.31 Altogether, the feedback from the participants helped in validating the
preliminary results from the Report Card survey. Also, they suggested areas of further
analysis and additional tabulations that should be undertaken in the Report Card, which
have been taken on board and implemented. The strong stakeholder participation in the
preliminary workshops suggests that there is great interest in the Report Card findings,
and positive expectations regarding the follow-up actions.
20. Detailed tabulations of the Report Card survey responses were carried out during
the succeeding six-months. A number of Bank sector specialists and national experts
prepared the write-ups on the five sectors utilizing the final data tables.32 They married
the Report Card survey findings with sector level data from different sources and
presented a comprehensive picture of the situation in the sectors. The detailed data tables
and draft sector write-ups have been shared with the government (through NEDA) to
encourage independent scrutiny and validation of the analysis by the government. A
number of initiatives and actions are already under way to address some of the constraints
identified by the users.33 Additional actions at the sector, program and project levels are
recommended to improve service delivery by public agencies, enhance complementarity
between public, private and civil society service providers, sharpen targeting of the
services, and promote accountability to the clients at the grassroots.
21. The Report Card survey responses are coded and recorded on compact disks and
are being made available to interested Filipino analysts, researchers and policy makers to
26 For example, Governor of Batangas, and representatives of Caloocan, Makati and Pasay Cities.
27 For example, Capitol Medical Center, University of Santo Tornas Hospital, St. Luke's Medical Center
and Maynilad Water Services, Inc.
28 For example, Children & Youth Foundation, Coalition of Development NGOs, Education, Research &
Development Assistance Foundation, Institute on Church & Social Issues and Health Dev Institute of
Ateneo De Manila University, Freedom to Build, Philippine Rural Reconstruction Movement, and Women
Health Philippines.
29 A separate presentation on the preliminary findings was made at the Asian Development Bank.
30 For example, provincial planning and health officers, regional directors of DECS and NEDA, and
functionaries of DPWH, LWUA, DILG, DSWD and NFA.
31 For example, according to official data, the teacher pupil ratio is lowest in Mindanao, while the Report
Card results (confirmed by the feedback from the participants from Mindanao) show that a large class size
is a problem in Mindanao.
32 The health and education chapters are prepared by Jayshree Balachander, and the water chapter by Vijay
Jagannathan and Mariles Navarro. Mary Racelis is the main author of the housing chapter, while Ching
Dela Peina and Carol V. Figueroa-Geron have collaboratively written the rice chapter.
33 For example, the implementation of the Health Sector Reform Agenda, which addresses several
constraints identified by the clients has begun, albeit, on a modest scale.
Filipino Report Card on Pro-Poor Services 8
Chapter 1: Introduction
carry out further analyses and interpretation. Copies of the preliminary results presented
to the stakeholders in June 2000 are made available as well, and a copy of the concept
paper has been posted on the Bank's Philippines website.
22. The draft Report Card was shared with stakeholder representatives and their
reactions sought and incorporated in the final report. The next step is to stimulate
informed dialogue and follow-up actions by the government, private sector and civil
society to improve service delivery. The follow-up actions contemplated to facilitate
such outcomes include the following:
* consultations with concerned public agencies individually on the Report Card
results to help them understand client concerns, how ongoing and proposed
actions in the sector are likely to address these, and identify necessary
adjustment and additional actions to better respond to client needs;34
* consultations between different public agencies on common citizen concerns
that span across sectors. This should help evolve approaches to addressing the
common problems (sectoral and systemic) by service providers and by
coordinating agencies (e.g., NEDA, DBM and DOF). Also, it should provide
an opportunity to learn from the successes and mistakes of different
approaches adopted by the various agencies;
* consultations between service providers (public, private and civil society
organizations) and citizens to help the different groups appreciate the
constraints and strengths faced by each; identify potential complementarities
and explore ways of exploiting them; and reach an agreement on mutual
obligations, responsibilities and commitments;
D advocacy and dissemination of the Report Card results35 through the media to
help Filipinos, including the poor, understand the situation, possible options,
and ways in which concerns of the poor and the under-served could be
"voiced" to make a difference in service delivery.
6. STRUCTURE OF THE REPORT
23. The report is organized by sectors/program. Chapter II presents the results and
recommendations on Health; Chapter III on Elementary Education; Chapter IV on Water
Supply; Chapter V on Housing; and, Chapter VI on Subsidized Rice Distribution. An
34 The concerned agencies may wish to undertake more in-depth analysis of problems before implementing
corrective actions.
35 It is recognized that different versions of the Report Card may have to be produced depending on the
target audience. For instance, busy policy makers may require a short note summarizing the key Report
Card findings, as included in the executive summary. On the other hand, sector specialists may require
more in-depth analysis as presented in the sector chapters I1-VII. Ordinary citizens, and their
representatives, may value yet another form of the Report Card; perhaps a "folksy" version, which
demystifies service provision and provides them with simple information based on which they could
advocate for better performance from service providers.
Filipino Report Card on Pro-Poor Services 9
Chapter 1: Introduction
analysis of the initial experience with the Lingap Para sa Mahihirap Program, the
flagship program of the Estrada Administration to "care for the poor," is presented in
Chapter VII. It is followed by Chapter VIII on Institutionalization of the Report Card.
24. Appendix 1 presents the details on the sample design, questionnaire, survey
execution, characteristics of the sample households, their geographic distribution, and
key poverty concepts and classifications.
7. LAST WORD
25. It is recognized that no single sample of 1,200 households, no matter how
carefully selected and representative, can fully represent a country as large, diverse and
unique as the Philippines. Nevertheless, the Report Card does provide valuable feedback
from a wide spectrumn of Filipinos on pro-poor services. The citizen assessments have
been collected by means of sound and well-tested survey techniques. The results are
subjected to rigorous standard error analysis, which show that the findings included in the
sector chapters are significant. Admittedly, the Report Card tool is not perfect at entry,
and there will be incremental improvements as the Report Card tool is repeated and
institutionalized. But what matters most, is that the Report Card provides a learning and
feedback mechanism for service providers and policy makers, and an avenue to directly
listen to their clients.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER II: HEALTH'
"The health sector in the Philippines is not doing well. This is due to an inappropriate health delivery
system and an ineffective mechanism for providing public health. "
Department of Health, Health Sector Reform Agenda, 1999-2004
1. POVERTY AND HEALTH
1. Lack of good health is both a cause and a consequence of poverty.2 Cross-
country comparisons have long established a high correlation between GDP and life
expectancy on the one hand and infant mortality rates (IMRs) on the other. Data on intra-
country differences in health status have recently become available. The data confirm
that the same inter-country inequities also apply within countries, with the richer sections
of the population within poor countries often enjoying health status comparable to that of
citizens of industrialized nations, rather than their national counterparts.3
2. Key health indicators for the Philippines, for example, show that IMRs of the
poorest quintile are three times higher than for the richest quintile. Inequities in health
status also result from location differences. For example, the richest quintile in rural
areas has an IMR that is twice that in urban areas; and the under-five mortality rate is also
significantly higher for the same quintile in rural areas. In addition, wide disparities in
health status persist across regions. The highest IMR is recorded for ARMM in
Mindanao, while the National Capital Region (NCR), which is the most urbanized region,
continuously registers the lowest lMR.4
3. A number of socioeconomic variables determine the health status of a population,
and they operate at least at three different levels: (i) household-level determinants such as
income, education and intra-family "voice," (ii) community-level determinants including
environment, norms and values, and (iii) health-system determinants covering, inter alia,
accessibility and quality. The Filipino Report Card on Pro-Poor services focuses on the
service delivery of the country's health system, probing such facets as access, use,
satisfaction, and costs incurred by different socioeconomic groups, with the objective of
assessing whether the system is pro-poor.
' This chapter has been prepared by Jayshree Balachander, with inputs from the Report Card team.
2 In a December 2000 national opinion survey in the Philippines, the Social Weather Stations asked
respondents: "As Christmas and the end of the year approach, may I know what one or two things you are
most thankful for in your life right now?" The most common response (40% of all respondents) was thanks
for personal and/or family health, i.e., not being sick. Thankfulness for good health was more commonly
expressed, the poorer the respondent.
3 Demographic and Health Survey, 1998; and Gwatkin et al. 2000. Socio-Economic Differences in Health,
Nutrition, and Population, World Bank, Washington, D.C.
4Philippines Health Situationer, 1998 (ADB Compendium of Health Statistics in the Philippines).
Filipino Report Card on Pro-Poor Services II
Chapter ll: Health
2. THE SURVEY
4. Of the total 1,200 sample households canvassed in the Filipino Report Card, 919
(or 77%) used health services of one type or another in the twelve months preceding the
survey period. The survey responses are analyzed by geographic region,5 rural and urban
location, and one measure of poverty status of the households. The poverty measure is
based on household expenditure (expenditure poverty) in three categories - the poor
covering those in the lowest three expenditure deciles (or, bottom 30%), the middle-
income households that fall in the fourth to sixth expenditure deciles (or, middle 30%),
and the rich that are placed in the top four expenditure deciles (or, top 40%).
3. USE AND ACCESS
5. The socioeconomic variables that affect the health status of a population also
influence its behavior in seeking health services. The Filipino Report Card showed a
fairly widespread use of health facilities in the country, with more than three-fourths of
the households surveyed having used health facilities of one type or another in the twelve
months preceding the survey.
6. The majority of the remainder who did not visit a health facility (19%) in the
survey gave absence of illness as the reason. A possible implication of this is that the
health facilities and services are seen to be essentially "curative", with a lower emphasis
on the preventive aspects.6 Other reasons for not visiting a health facility included self-
medication and high cost of medical care.
7. The proportion of households that visited a health facility in the past twelve
months is higher for urban (80%) as compared to rural (72%) households. The largest
number of visits was made in Mindanao, followed by Visayas. Possible explanations
include poorer health status in Mindanao and Visayas than in Luzon, or less effective
care, necessitating many repeat visits; the latter being the more plausible explanation on
the basis of the kinds of facilities used (see below).
8. A larger proportion of non-poor households visited health facilities compared to
poor households in the last twelve months. While only 70% of the poor used health
facilities, 75% of the middle-income and 82% of the rich did so. This is cause for
concern since poor Filipinos are more likely to suffer from ill health compared to their
better off counterparts.7
9. Respondents in the survey were asked which of six kinds of health facilities they
or any member of their family had visited in the last year and their responses are shown
5 Geographical categories included in the survey are aggregate Republic of Philippines (RP), National
Capital Region (NCR), rest of Luzon (or Balance Luzon), Visayas and Mindanao.
6 The use of preventive health services by only about 40% of the households that used health facilities adds
credence to this.
7For example, a recent Social Weather Stations national survey asked respondents whether they were sick
at any time in the last two weeks. Overall, 29% of the respondents reported sickness. In terms of poverty
groups, 32% of poor adults were sick, compared to only 19% of rich adults.
Filipino Report Card on Pro-Poor Services 12
Chapter I: Health
in Table 1. Government primary facilitiesg were the most frequented overall (51%),
followed by private clinics/hospitals (49%) and government hospitals (39%), while the
non-profit/NGO sector plays a very small part in the total provision of health services.
This picture changes somewhat when the data are disaggregated by region. In NCR,
private clinics/hospitals were visited almost twice (or more) as frequently as government
primary facilities or govermment hospitals, despite the large number of government
hospitals located there. In Balance Luzon, the usage of govermment hospitals and private
clinics/hospitals is high and it appears that clients are bypassing primary facilities.
Table 1: Utilization of Health Facilities by Region
(Percentage usage by facility)
Barangay Private Non-Profit
Health Health Government Government Clinic/ Clinic/ Traditional
Region Station Center Primary Hospital Hospital Hospital Healer
RP 29 22 51 39 49 4 27
NCR 13 20 32 30 59 4 7
Balance Luzon 14 17 31 45 49 2 11
Visayas 43 19 62 42 46 4 42
Mindanao 51 34 85 32 46 5 51
Note: The row totals add up to more than 100% due to multiple uses of facilities by many households.
10. Traditional healers, who are important providers in Mindanao and the Visayas,
are hardly used in NCR and Balance Luzon. In Mindanao, there was overwhelming
reliance on government primary facilities (barangay health stations, in particular),
followed by traditional healers. The users in Visayas, on the other hand, utilized
barangay health stations, traditional healers, government hospitals and private
hospitals/clinics in almost equal measure.
11. While access to health facilities is good on average, hard to reach pockets
continue to pose a challenge to the Philippines health system. Users of private facilities
were asked whether the reason for not using government facilities was because that type
of facility was not available. At the aggregate (RP) level, about 8% of those who used
private health facilities stated that they did not have access to any government facility.
The proportion is highest in Mindanao (11%), compared to other regions. This finding is
supported by secondary data, which highlights that Mindanao consistently has the highest
ratio of population served per government facility.9
12. Data on the reasons for use of different health facilities are also available by
expenditure groups. One-in-five (20% of) poor households using private health facilities
indicated non-availability of any alternative government health facilities as the reason.
The corresponding proportions for middle-income and rich households are 7% and 5%
respectively. Overall, access to health facilities, especially government facilities,
continues to be a constraint facing poor Filipinos.
' Barangay health stations and rural health units/urban health centers (henceforth referred to as health
centers) together constitute government primary facilities.
9 For example see table on Number and Ratio of Rural Health Units to Population by Island Groups, 1992 -
1996, DOH, Philippines Health Situationer, 1998.
Filipino Report Card on Pro-Poor Services 13
Chapter II: Health
13. Utilization of private facilities varied significantly by expenditure group and
urban/rural residence (see Table 2 below). Private clinics/hospitals are predominantly
used by the rich households and urban respondents, although they account for a
significant portion of the health care facilities used by middle-income, poor and rural
respondents as well.10 On the other hand, barangay health stations, health centers and
traditional healers were more frequently used by rural and poor households. The non-
poor, especially middle-income households, are twice as likely to use government
hospitals than the poor.
Table 2: Utilization of Health Facilities by Location and Expenditure Class
(Percentage usage)
Barangay Private
Health Health Government Clinic/ Non-Profit Traditional
Area/ Group Station Center Hospital Hospital Clinic Healer
Urban 24 19 36 56 4 20
Rural 37 28 43 38 3 39
Bottom 30% 37 28 37 28 3 40
Middle 30% 34 27 48 42 4 31
Top 40% 21 16 34 68 4 16
Note: The row totals add up to significantly more than 100% due to multiple uses of the facilities by many households.
14. The urban bias is consistent with the unequal distribution of medical personnel
across rural and urban areas in the Philippines. While the overall physician-to-population
ratio in the country is comparable to that in Taiwan, and exceeds the ratios in Thailand
and Indonesia, only 10% of doctors, dentists and pharmacists, 20% of medical
technicians, and 35% of nurses practice in rural areas."1 Metro Manila alone accounts for
about half of all physicians and two thirds of all dentists.12
15. The Demographic and Health Survey data also confirm limited use of government
primary facilities by the rich as compared to the poor. 13 For example, the percentage of
sick children treated in a public (government) facility was much lower in the higher
income groups. The overwhelming majority of women from poor households delivered
at home and without support from a medically trained person, whereas women from the
richest households usually delivered in a private facility with a medically trained person
(mostly a doctor) in attendance.
16. In sum, although the poor are more likely to suffer from ill health compared to the
better-off, they are less likely to visit a health facility. Moreover, the poor are more
likely to visit primary health care facilities or traditional healers and less likely to see a
tO In many countries, even poor people prefer to spend money on health services from the private sector (or
NGOs) if they perceive the quality to be higher than that of public services. World Development Report,
2000, Chapter 5. This is supported by the Filipino Report Card findings which reveal that the poor who
used private facilities spent 20% of their household expenditures on these private services. In comparison,
the rich and middle-income groups spent only 5% of their household expenditures on private facilities.
" Health Manpower, Profile, Stock and Requirements, PIDS Discussion Paper, Series No. 95-31, 1995.
12 A Strategy to Fight Poverty, Philippines, The World Bank, 1996.
13 Demographic and Health Survey, 1998; and Gwatkin et.al., Socio-Economic Differences in Health,
Nutrition, and Population, World Bank, Washington, D.C.
Filipino Report Card on Pro-Poor Services 14
Chapter Il: Health
doctor than the rich clients. The same pattern holds for rural areas compared to urban,
and for the regions of Mindanao and Visayas compared to NCR and Balance Luzon.
While access (availability of facility/personnel) may be an important dimension in
explaining this pattern, affordability (or ability to pay) may be an equally or more
important factor.
4. SERVICES PROVIDED BY HEALTH FACILITIES
17. Respondents were asked about the kinds of treatment they sought at the different
facilities and the differences emerging in the nature of care provided by different levels of
facilities are summarized in Table 3. Preventive health services (including immunization,
health and nutrition education, family planning and routine check-up) are the mainstay of
government primary facilities accounting for 63% of all services provided by these
facilities. Treatment of minor accidents and minor illnesses account for another 30% of
the services provided by government primary facilities. These are appropriate functions
for the primary health facilities. Traditional healers are most often consulted for minor
accidents (sprains, etc.) and illnesses. They may be good complements for government
primary facilities.
18. However, the same services (i.e., preventive healthcare and treatment of minor
accidents and illnesses) also account for two-thirds of all the services provided by
government hospitals and private clinics/hospitals. Treatment of major accidents and
illnesses and laboratory services account for only about a third of the services provided
by government hospitals and private clinics and hospitals. Provision of these types of
services should be the primary function (main business) of both government and private
secondary and tertiary facilities.
Table 3: Type of Services Provided by Different Health Facilities
(Percentage of households)
Government Private Clinic Traditional
Services Government Primary Hospital / Hospital healer
Health & Nutrition Education 9 3 2 0
Immunization 14 1 3 0
Family Planning 6 1 1 0
Routine check ups 34 30 31 5
Preventive Healthcare 63 35 37 5
Minor Accidents 1 3 I 68
Minor Illnesses 29 28 31 19
Minor Accidents & Illnesses 30 31 32 87
Laboratory Services 2 10 10 0
Pre/post natal and delivery 3 4 4 2
Major Accidents 1 2 2 I
Major Illnesses 2 18 1 5 4
All other services 8 34 31 7
Preventive healthcare comprises health and nutrition education, immunization, family planning and routine check-ups.
All other services cover laboratory services, pre/post natal and delivery, major accidents and major illnesses, plus any
other service not covered under preventive healthcare and minor accidents and illnesses.
Filipino Report Card on Pro-Poor Services 15
Chapter II: Health
19. Stated another way, about two-thirds of all services provided by government
hospitals and private clinics/hospitals are classified as routine check-ups or minor
accidents/illnesses, confirming that clients are by-passing lower level facilities that
(should) offer these services. This is despite the fact that government primary health
facilities are most conveniently located with 69% of households having access to a
barangay health station within a 15-minute walk, and 46% to health centers. However
these facilities are frequently by passed14 (see Table 4 below).
Table 4: Using/Bypassing of Health Facilities within Easy Access
(Households within a 15-minute walk from facility)
Barangay Health Government Private Traditional
RP Health Station Center Hospital Clinic/Hospital Healer
Percent using 32 26 50 60 27
Percent bypassing 68 74 50 40 73
20. At least two issues need to be addressed in this context: (i) how to improve the
quality of government primary facilities to enable clients with easy access to use them;
and, (ii) how to encourage secondary and tertiary facilities to provide specialized services
for which they were created. In addition, referral mechanisms among different health
facilities, and across local government units, need to be strengthened.15 The patient
classification system in government hospitals also needs to be reviewed and improved.
21. The situation is further exacerbated in government hospitals by the fact that many
provincial and district hospitals have been strapped for cash after devolution, particularly
for operating expenses, and have lost managerial autonomy. As a result, more patients
are forced to bypass the local government hospitals and seek out better-endowed national
government (or DOH-retained) hospitals. Most of the DOH-retained hospitals are in
urban and better off areas/municipalities and DOH now spends more than half its budget
on around 50 of these retained hospitals. Thus, the distribution (location) of the DOH-
retained hospitals aggravates the inequity in access to these facilities by residents in
poorer and rural areas. Further, the allocation of the lion's share of DOH budget to the
DOH-retained hospitals crowds out badly needed resources from other government health
facilities and programs.
22. The Health Sector Reform Agenda (HSRA) recommends that DOH-retained
hospitals should be allowed to collect and retain user fees and other forms of revenue, so
their dependence on direct govermment subsidies can be reduced over time, and they can
14 The reasons why clients are bypassing the government primary facilities may be discerned from the
results on client satisfaction ratings on the overall and specific aspects of these facilities presented in the
following sections.
15 According to the Health Sector Reform Agenda (HSRA), devolution of health services to local
govermment units (LGUs) has led to fragmentation of local health services and deterioration of integrative
approaches to health care delivery. One proposal of the HSRA is that several LGUs group together to form
individual Inter-Local Health Zones, which among other things "poor' budgets and information. Another
option for consideration is charging for primary care services provided at govermment hospitals, which may
encourage the use of cheaper lower-level facilities such as barangay health stations and health centers.
Introduction of cost recovery measures at higher-level facilities can, therefore, be a tool for facilitating
rational referral patterns.
Filipino Report Card on Pro-Poor Services 16
Chapter 11: Health
eventually become financially autonomous.16 This will free public resources for primary
and preventive care, and hitherto less advantaged public facilities.
5. SATISFACTION WITH HEALTH FACILITIES
23. Overall satisfaction or "appreciation" with health facilities is quite high (more
than somewhat satisfied),17 and significantly higher for private facilities than government,
with the top three satisfaction ratings going to the three private sector providers - private
non-profit clinics/hospitals, private for profit clinics/hospitals and traditional healers.
Rural and urban health centers were a distant fourth, followed by government hospitals
and finally barangay health stations (see Table 5 below).
24. Besides private for-profit clinics/hospitals, traditional healers are noteworthy for
receiving uniformly high satisfaction ratings for the services they provided. There are
some regional differences, with the households in Balance Luzon being least satisfied
with barangay health stations; those in Visayas with government hospitals; and
Mindanao households with health centers.
Table 5: Overall Net Satisfaction Rating of Most Frequently Used Health Facility
Barangay Health Government Private For Proflt Non-Profit Traditional
Regin HeStationb Center Hospital CliniclHospital Clinic/Hospital Healer
RP 1.14 1.22 1.19 1.55 1.57 1.55
NCR 1.14 1.22 1.19 1.55' 1.57 1.55
Balance 0.82 132 1.30 1.46 1.00 1.41
Luzon
Visayas 1.37 1.19 0.83 1.73 2.00 1.63
Mindanao 1.18 1.00 1.27 1.62 1.83 1.57
Very satisfied: 2; Somewhat satisfied: I; Undecided: 0; Somewhat dissatisfied: -1; Very dissatisfied: -2
25. Data on overall satisfaction ratings of different health facilities by expenditure
groups are presented in Table 6 below. Satisfaction ratings varied somewhat with
expenditure class, although the top three facilities for each group continued to be private
sector providers. 8 The poorest group is somewhat more satisfied with barangay health
stations than the others. Rural respondents rated government primary facilities lower
than urban respondents, perhaps because of better staffing, facilities, equipment and
supplies in the urban facilities.
16 The Report Card findings indicate that a majority of clients, including the poor, are willing to pay
additional to public health facilities to solve their dissatisfaction with these facilities.
17 Net satisfaction scores are computed using the following weights: Very Satisfied - plus 2; Somewhat
Satisfied - plus 1; Undecided whether satisfied or not - 0; Somewhat dissatisfied - mninus 1; and Very
Dissatisfied - minus 2. Thus, the net satisfaction score is a weighted average, which ranges in value from
(+)2 to (-)2.
's The only exception being the middle-income group which rated government hospitals third highest and
ahead of private non-profits
Filipino Report Card on Pro-Poor Services 17
Chapter Il: Health
Table 6: Overall Net Satisfaction Rating of Most Frequently Used Health Facility
Barangay Non-Profit
Poverty Health Health Government Private For Profit Clinic/ Traditional
Group Station Center Hospital Clinic/Hospital Hospital Healer
RP 1.14 1.22 1.19 1.55 1.57 1.55
Bottom 30% 1.24 1.16 1.17 1.69 1.60 1.52
Middle 30% 1.02 1.20 1.32 1.44 1.14 1.80
Top 40% 1.17 1.35 1.09 1.57 1.82 1.40
Very satisfied: 2; Somewhat satisfied: 1; Undecided 0; Somewhat dissatisfied: -1; Very dissatisfied: -2
26. Respondents most frequently using government health facilities were asked to
compare government facilities with private facilities on seventeen aspects of the health
providers such as treatment received, facilities, waiting time, competence and attitude of
health professionals, cost and availability of medicines; and rank them as better, just as
good or not as good. The proportion of households falling under each of the three
categories (i.e., better, just as good and not as good) is listed under "Government" in
Table 7. Similarly, respondents most frequently using private health facilities were asked
to compare private facilities with government facilities on the same aspects of the health
providers and rank them as better, just as good or not so good. The proportion of
households falling under each of the three categories (i.e., better, just as good and not as
good) is listed under "Private" in Table 7.
Table 7: Cross-Comparison of Government and Private Health Facilities19
(Percentage of households most frequently using the category of facilities)
Better Just as Good Not as Good
Aspects of Service Government Private Government Private Government Private
1 2 3 4 5 6
1. Consultation/Treatment Received 33% 72% 37% 21% 31% 7%
2. Medical Facilities 15% 73% 23% 15% 35% 6%
3. Non-Medical Facilities 16% 77% 37% 18% 45% 5%
4. Waiting Time 21% -73% 40% 24% 39% 3%
5. Paperwork Requirements 18% 52% 40% 30% 19% 6%
6. Convenience of Schedule 25% 63% 50% 33% 24% 4%
7. Attitude of Health Personnel 24% 64% 53% 31% 24% 4%
8. Number of Health Personnel 28% 64% 43% 24% 29% 11%
9. Availability of Health Personnel 25% 68% 47% 27% 28% 5%
10. Competence of Health Personnel 22% 70% 53% 26% 25% 4%
11. Understanding of your Health Issues 22% 57% 55% 39% 20% 3%
12. Availability of Medicines & Supplies 23% 73% 34% 22% 43% 4%
13. Quality of Medicines & Supplies 20% 70% 46% 26% 33% 4%
14. Cost of Medicines & Supplies 67% 30% 21% 25% 9% 45%
15. Cost of Treatment 76% 29% 14% 21% 7% 50%
16. Flexibility of Payment 60% 34% 25% 35% 8% 30%
17. Convenience of Location 56% 50% 30% 39% 14% 11%
27. More than two-thirds of the households that frequently used private health
facilities ranked the private facilities to be better than government facilities on the first
13 aspects that have a direct impact on the quality of services provided. On the other
19 Cross-comparison forces respondents to make a critical assessment of the alternatives which are available
to them. Respondents who stated that the alternative was not available were not asked this battery of
questions.
Filipino Report Card on Pro-Poor Services 18
Chapter ll: Health
hand, less than one-third of the households that frequently used government health
facilities ranked the government facilities to be better than private facilities on the first
13 quality aspects.
28. Convenience of location (aspect 17 in Table 7 above) of government and private
facilities was ranked to be approximately the same by the two groups. However, a
majority of both groups ranked government facilities to be more advantageous than
private facilities on the three cost aspects (aspects 14 to 16: cost of medicines and
supplies, cost of treatment, and flexibility of payment).20
29. Overall, it is fair to conclude that private facilities are ranked superior on quality
aspects, on par with government facilities on convenience of location, and not as good on
cost aspects. In other words, the clients indicated that cost is the only categorical
advantage of government facilities over private facilities. This is cause for concern both
from the perspective of "value for money" for public expenditure on health and the
inequitable access to (distribution of) the services of government facilities among
Filipinos.
30. Data on client satisfaction with each of the six health facilities on the 17 aspects
are also compiled. Differences between the facilities and the advantages and drawbacks
of each emerge from these ratings (see Table 8 below).
Table 8: Net Satisfaction Rating of Specific Aspects of Health Facilities
BHS RHU/C GH PPC/H PNC/H TH/A
Aspects of Service 1 2 3 4 5 6
1. Treatment Received 1.06 1.09 1.16 1.46 1.22 1.53
2. Medical Facilities 0.20 0.39 0.93 1.37 1.41 0.67
3. Non-Medical Facilities 0.57 0.73 0.63 1.31 1.35 1.11
4. Waiting Time 0.63 0.50 0.62 1.14 1.09 1.49
5. Paperwork Requirements 0.83 0.78 0.92 1.23 1.00 -0.3321
6. Convenience of Schedule 0.90 0.98 1.03 1.33 1.26 1.27
7. Attitude of Personnel 1.05 1.10 0.99 1.48 1.50 1.50
8. Number of Personnel 0.90 0.90 0.98 1.38 1.26 0.96
9. Availability of Personnel 1.00 0.86 0.99 1.39 1.30 1.47
10. Competence of Personnel 1.02 0.96 1.07 1.50 1.43 1.50
11. Understanding of your Health Issues 0.88 1.09 1.06 1.41 1.30 1.24
12. Availability of Medicines & Supplies 0.62 0.45 0.63 1.42 1.35 0.84
13. Quality of Medicines & Supplies 0.83 0.73 0.85 1.48 1.35 1.13
14. Cost of Medicines & Supplies 0.98 0.88 0.80 0.61 0.57 1.55
15. Cost of Treatment 1.21 1.20 1.17 0.77 0.48 1.59
16. FlexibilityofPayment 1.11 1.09 1.10 0.91 0.74 1.36
17. Convenience of Location 1.41 1.46 0.85 1.08 1.04 1.60
Very satisfied: 2; Somewhat satisfied: 1; Undecided 0; Somewhat dissatisfied: -1; Very dissatisfied: -2
31. A thumbnail sketch of the different facilities drawn from the perspective of the
clients reads as follows:
20 Report Card findings reveal that the median household health expenditures of users of government
facilities are only one-fifth of the health expenditures of users of private facilities.
21 Given the very small number of respondents rating this aspect for traditional healers, the low rating for
paperwork requirements should be assessed as applicable to only a handful of traditional healers. In fact,
one would expect that there would be minimal paperwork requirements for traditional healers.
Filipino Report Card on Pro-Poor Services 19
Chapter 11: Health
* Barangay Health Stations: The quality of services is low, and diagnosis often poor.
Health stations are conveniently located, but schedule is very inconvenient.22
Medical and other facilities are minimal, medicines and supplies, which are of low
quality, are not readily available.23 However, when open, waiting time is less than at
other government facilities (although there is considerable scope for improvement),
and personnel are available. Staff are not particularly competent and do not have a
good understanding of health issues, or pleasant attitudes. Cost of medicines and
treatment is low, and the facility scores high for flexibility of payment.24 The facility
is very popular in Mindanao and Visayas and among the poor, particularly for
preventive services such as immunization and also for treating minor ailments.
* Rural Health Units/Urban Health Centers: Although very conveniently located,
these are the least used of the government facilities, and with good reason. Personnel
are rarely available25 and seem to be the least competent among government health
workers, although appreciated for their attitude by the clients. Waiting time is the
worst of all government facilities and there are rarely any medicines available. There
is even less flexibility of payment than in government hospitals. Not surprising then
that they are bypassed more frequently than even barangay health stations.
* Government Hospitals: They have the best medical facilities of public health
services, the most numerous and the most competent health personnel, but with the
worst attitude. They have the best schedule of government facilities, although
waiting time can be long. They have the least convenient location (mostly located in
Metro Manila and other big cities), but they usually have medicines at reasonable
cost. However, government hospitals have least satisfied clients in urban areas,
where they are more prevalent.
* Private For-Profit Providers: They rate extremely high on all quality aspects.
Personnel are competent and service-oriented and their numbers and availability are
adequate. Quality medicines are available, although they are expensive. Facilities
are good and schedules are convenient, although waiting time could be high in some
cases. The major issue is cost.
* Private Non-Profit Providers:26 Services are good to better in all respects than in
government facilities. They have the best facilities, both medical and non-medical,
and their personnel have the best attitude. However, they account for a very small
portion of all health services and are not conveniently located. Most surprising, they
22 In fact, most barangay health stations operate only for two to three days in a week, often in makeshift
facilities, with health personnel visiting from health centers.
23 Generic drugs and medicines provided by primary facilities are perceived as low quality by clients,
compared to the more popular brand names available in the market.
24 Clients are not supposed to pay for medicines and treatments in public primary facilities. It is only when
medicines are not available, which happens frequently, that patients are asked to buy them in the market.
In addition, clients are often asked for "donations."
25 In part, because the same personnel are often also serving barangay health stations.
26 The number of sample households using private non-profit providers is small, and the results on these
providers should be treated as indicative only.
Filipino Report Card on Pro-Poor Services 20
Chapter II: Health
cost more than all other types of health facilities, and the rich seem to be most
satisfied with their services, while the poor prefer the private for-profit to the non-
profit clinics/hospitals.
* Traditional Healers: If they could cover the gamut of health problems, and had the
necessary facilities, they would be the hands-down favorite.27 Cost and convenience
are the two main attributes appreciated by the clients. Traditional healers were rated
higher than even the government facilities on cost. They deliver for the client the
limited range of services to the extent that the client has expectations of them.
6. HEALTH EXPENDITURES
32. The National Statistical Coordination Board (NSCB) estimated that in 1997,
Filipino households and the Government spent about PhP88.4 billion (about US$2
billion) on healthcare, or about 3.5% of GDP, which is lower than the WHO
recommended norm of 5% for middle income countries.28 Households are the major
financiers of healthcare in the Philippines, contributing about 48% of total health
expenditures in 1997.29 The National Government accounts for 21% of total
expenditures, while local governments finance 18%. In developed countries,
governments typically finance a greater share of the costs (about 75%), while in the least-
developed countries, they finance less (as little as 20%). Table 9 provides data from the
Report Card survey on health expenditures by households in the Philippines by region
and rural/urban residence.
Table 9: Health Expenditures by Region and Location
(Mean and Median annual expenditures per household)
Mean Expenditures Median Expenditures
Region/Area (PhP) (PhP)
RP 9,730 1,180
NCR 10,263 2,000
Balance Luzon 15,21530 1,129
Visayas 4,951 870
Mindanao 5,394 800
Urban 11,437 1,580
Rural 6,903 800
33. The largest number of visits to health facilities, according to the survey, occurred
in Mindanao and the Visayas, but NCR dominates median health expenditures. This can
be explained, at least in part, by the type, quality and source of the services. Median
27 Traditional healers often treat sprains and minor accidents, (making and) providing their own health
supplies, relying mostly on indigenous materials; whereas the other facilities depend, for the most part, on
purchased medicines and supplies, including many procured from abroad.
28 Philippines National Health Accounts, 1997, National Statistical Coordination Board.
29 Access to health care in the Philippines is inequitable, as the burden of financing still rests largely on
individual families.
30 Mean expenditures in Balance Luzon could have been skewed as a result of a few cases of catastrophic
care.
Filipino Report Card on Pro-Poor Services 21
Chapter II: Health
expenditures in NCR are about twice as high as those in Balance Luzon, Visayas and
Mindanao. Also, the healthcare expenditure of urban households is, on average, twice as
large as that of rural households.
34. In absolute amounts, the poor spend much less on health services than the rich
(see Table 10 below). Median expenditures of the bottom 30% are about one-tenth that
of the richest 40%. One reason may be that the poor use more of the cheaper government
primary health facilities. Unfortunately, what they gain in cost may be lost in the poor
quality of services received.31 However, even the modest health expenditures of the poor
absorb a larger share of their household expenditure as compared to that of the rich.
Also, the share of health expenditures in total household expenditure of middle-income
households was, on average, two-and-a-half times as much as that of the rich; and almost
twice as large as that of the poor. Although this may be partly explained by a few
outliers (catastrophic care cases), it is necessary to further explore the reasons for such
high expenditures on healthcare by the middle-income households.32
Table 10: Health Expenditures by Expenditure Class
(Mean and Median annual expenditures per household)
Mean Expenditures Median Expenditures Share in Total Household
Poverty Group (PhP) (PhP) Expenditure *
Bottom 30% 3,082 500 7%
Middle 30% 11,354 883 13%
Top 40% 12,899 4,675 5%
*Average (mean) household expenditure as a percentage of total (mean) household expenditure.
35. Among the components of health expenditures (see Table 11 below), medicines
and supplies accounted for the largest share (49%),33 followed by hospital stays (33%/0),
consultation/treatment (10%), and laboratory services (7%).
Table 11: Components of Household Health Expenditures
Components Mean Expenditure (PhP) Percentage in Total
Medicines 4,762 49
Hospital Stay 3,193 33
Consultation/Treatment 995 10
Laboratory 665 7
Other 115 1
31 This may at least in part explain the significantly larger number of visits by the poor to primary health
facilities, which may be the result of inadequate diagnosis and treatment of their maladies.
32 Anecdotal evidence from stakeholder workshops suggest that middle-income households are often forced
to spend a disproportionately large share of their expenditure/income on health, education and other basic
services, because they are either not eligible to receive (excluded from) subsidized services or are reluctant
to seek the subsidized services because of the stigma attached to them. Thus, they are squeezed from both
ends of affordability and keeping up appearances.
3 According to a recent study by the Department of Health the cost of medicines in the Philippines are
higher than in other ASEAN countries. The challenge for the Health Sector Reform Agenda is to reduce
these costs by either intervening on the supply side (prices, volumes) and/or the demand side (monitoring
prescribers/dispensers and educating consumers).
Filipino Report Card on Pro-Poor Services 22
Chapter II: Health
36. Respondents in NCR and Balance Luzon spent more than twice as much on
medicines and supplies than did those in Visayas or Mindanao (see Table 12 below).
Mean hospital expenditures were even across regions, except for Balance Luzon, which
could have been skewed upwards by some outliers.
Table 12: Health Expenditures by Type of Service
(Mean expenditures in PhP per household in the last 12 months)
Hospital Consultation/ Laboratory Emergency Other
Region Medicines Stay Treatment Tests/Services Transport Services
RP 4,762 3,193 995 665 126 115
NCR 5,213 1,670 1,797 1,400 35 183
Balance Luzon 7,618 5,805 983 739 160 70
Visayas 2,435 1,666 494 367 16
Mindanao 2,251 1,574 956 360 228 253
37. Low hospital costs in NCR could be a result of the large number of DOH
hospitals in the region. Expenditures on consultations were surprisingly high in Mindanao
as compared to those in Visayas. Laboratory expenses were low in Mindanao and
Visayas, probably as a result of a lack of sophisticated facilities. Emergency
transportation costs are highest in Mindanao suggesting a great distance from facilities.
38. Comparing health expenditures by type of service amongst the different
expenditure groups (see Table 13 below) shows that the middle 30% have surprisingly
high expenditures for medicine and less than expected for consultation, suggesting that
self-care is largely practiced by this group. This group also had the largest hospital and
emergency transportation expenditures.
Table 13: Health Expenditures by Type of Service
(Mean expenditures in PhP per household in the last 12 months)
Poverty Hospital Consultation/ Laboratory Emergency Other
Group Medicines Stay Treatment Tests/ Services Transport Services
Bottom 30% 1,398 968 527 230 8 38
Middle 30% 5,839 4,608 356 411 189 303
Top 40% 6,189 3,655 1,736 1,120 152 185
39. In summary, overall expenditure on health care (including that by households and
the Government) in the Philippines is lower than desirable. However, Filipino
households are funding a disproportionately large share of this expenditure. In particular,
public allocations in favor the poor are inadequate. Payments for health care by the poor
are almost entirely out-of-pocket as insurance coverage is low overall and negligible
outside NCR and Balance Luzon and outside the formal wage sector.34 This effectively
excludes the poor and self-employed from seeking care for major accidents/illnesses (or
catastrophic care), or good quality private care in general.
34 Of the 28 million Filipinos (36% of the population) covered by national health insurance, 92% either
work for the formal sector or the government, leaving out most of the self-employed, many of whom head
poor households. Only 840,000 indigents are covered by insurance (equal to about 1.2% of the total
population). According to the Health Sector Reform Agenda, the Philippines Health Insurance Corporation
(PHIC) has failed to cover indigents in poor provinces.
Filipino Report Card on Pro-Poor Services 23
Chapter Il: Health
7. KEY FINDINGS AND RECOMMENDATIONS
40. The Report Card survey raises the following important questions: To what extent
are government health services pro-poor? How best can the government ensure that the
poor get adequate health care? The answers to these questions are discussed with
reference to access to and quality of government services, the role of the private sector,
drugs and medicines and government health expenditures.
Access and Use
41. Overall use of health facilities by the poor is lowest among the expenditure
groups, although the poor are most in need of health care. Having said this, government
primary facilities are frequented most often by rural households and the poor, particularly
those in Mindanao and Visayas.
42. One-in-five poor households that used private facilities do not have access to any
government facility, most likely in the remote and poorer municipalities and in
Mindanao. An evaluation of the World Bank funded Philippines Health Development
Project showed that the project's greatest benefit was placing public health
nurses/midwives in barangays that had no medical facilities/practitioners. Giving
incentives to weak/poor local governments, private sector providers and non-
governmental organizations to cover remote and isolated areas with primary care services
would further enhance the access of the poor to these services. And, improvement of
infrastructure, such as rural roads, will allow existing primary facilities to be used more
intensively, especially by those with difficult physical access.35
43. Government hospitals are mostly located in urban areas, where they have the least
satisfied clients. For instance, while more than half the total national government budget
for hospitals is spent in NCR, clients favored private facilities two-to-one over
government hospitals in NCR The immediate priority with regard to government
hospitals may be to improve service quality.36 According to the clients, areas deserving
significant improvement include location,37 waiting time, skills and attitudes of staff, and
medical facilities and equipment. Geographically, government hospitals in Visayas and
Mindanao appear to be most disadvantaged.
44. Although the survey did not distinguish between government tertiary and
secondary facilities, it is established that district and provincial hospitals have suffered
from severe cutbacks in non-personnel expenditures and lack of management autonomy
after devolution. Quality upgrading of district and provincial hospitals is also necessary
35 Report Card findings reveal that a quarter of the households in the Philippines would have to walk more
than one hour to reach the nearest primary facility; 75% of these households choose to use an altemative
health facility.
36 For example, in 1999, PhilHealth evaluated 13,000 facilities as part of its accreditation process, the
majority of which were public. Of these, 305 were grossly deficient with the most common problems cited
as lack of basic equipment and supplies and rundown facilities.
37 Report Card findings reveal that more than half the households would have to walk more than one hour
to reach the nearest government hospital.
Filipino Report Card on Pro-Poor Services 24
Chapter Il: Health
to enable them to receive poorer patients, who may be unloaded by higher level hospitals,
as they become financially autonomous along the lines recommended by the HSRA.3g In
order to enable national and regional hospitals to become financially viable, they would
have to compete with private facilities. To this end, quality aspects of national and
regional hospitals will also require significant improvement so that they can attract
patients (those who are insured and/or who can afford out-of-pocket payments), in
parallel with their local counterparts.
Quality
45. The quality of government health services is perhaps the single most pressing
issue from the point of view of consumers. The survey clearly established that lower
costs (and easier access to some extent) are the only reasons clients continue to use
government facilities. In other words, government facilities are competing with private
facilities mainly on price, not on quality or satisfaction. Primary facilities, in particular,
are frequently bypassed, causing both government hospitals and private clinic/hospitals to
provide a large share of primary health services, such as routine check-ups and treatment
of minor illnesses, that ought to be handled at the primary facility level. Moreover,
because government primary facilities are largely frequented by the poor, improving the
quality of services with particular emphasis on those services mostly demanded by them
such as maternal and child health services, treatment for communicable diseases, minor
illnesses and minor accidents would greatly enhance the pro-poor nature of health
services.
46. Health centers, even more than barangay health stations, urgently need
improvement in facility operational schedules, reduction in waiting time and availability
of medicines, supplies, and skilled staff. Improving the services of barangay health
stations in Balance Luzon and health centers in Mindanao should be given special
attention. Training of frontline workers in case management is also desirable. The
Department of Health has launched a quality improvement initiative--Sentrong Sigla (or
Centers of Vitality) --in which 1,009 facilities,39 that meet certain quality standards, have
been certified with the "Sentrong Sigla" seal of approval. This is clearly a step in the
right direction and the program should be strengthened.40
47. Under the Sentrong Sigla program, the facilities meeting quality standards are
awarded with recognition and additional resources. To date, most of the facilities, which
have received the seal of approval seem to be in urban and/or better off areas and
municipalities. What remains to be addressed is that those who live in poorer and
isolated communities receive less and lower quality health services. A system of targeted
38 Health Sector Reform Agenda, Philippines, 1999-2004.
39 Facilities included are government hospitals (national government as well as local government operated)
and health centers.
40 Areas for strengthening the Sentrong Sigla include the quality standards used to judge the health
providers. For example, the quality standards for hospitals are less developed than those for health centers.
In addition, the current set of standards cover only "inputs," while additional standards for assessing
"outcomes" and "impacts" remain to be developed.
Filipino Report Card on Pro-Poor Services 25
Chapter 11: Health
capital and technical assistance, most likely geographic targeting, is required to upgrade
facilities in these excluded communities to Sentrong Sigla standards.
48. Improving the quality of services in the primary facilities may attract the poor to
use these facilities more frequently, and overall demand will increase. In addition, there
is a potential risk of attracting the non-poor (who are hitherto using either government or
private secondary and tertiary facilities to obtain the primary services) to these facilities
and limit the use of government primary facilities by the poor. This is most likely if the
quantity of services offered by government primary facilities does not increase pari
passu. Thus, improving the quality of services provided by government primary facilities
should go hand-in-hand with expansion of the volume of services provided by these
facilities in order for the poor to benefit from the actions.
The Private Sector
49. Private health facilities are the preferred option, but are not affordable, especially
for the poor. The DOH plan, as part of the HSRA, to increase insurance coverage and
social insurance in particular, would increase the service provider options now available
to the poor. At least two important issues are relevant in this context: (i) capacity of
private health providers to meet significant increase in demand for services; and, (ii)
availability of adequate resources for health insurance coverage for the poor, especially
for catastrophic care.
50. The DOH is also planning, as part of its health reform agenda, to improve
regulation of the private sector. It would need to consider carefully the kind of regulation
that would be appropriate in a situation where the regulatory machinery is considered
weak and corrupt, and where consumers are satisfied with services provided by the
private sector. It is already recognized by the Department, for example, that standards
regulation would affect public facilities more than private facilities.
51. Health NGOs/non-profits were highly appreciated in Mindanao and the Visayas
and are a potential complement for government service providers. At present, however,
their services are more readily available to better off sections in urban areas. Further,
respondents are even less satisfied with their costs than with those of private for-profits
(perhaps higher expectations are involved) and it is the highest income group that was
most satisfied with their services.
52. Traditional healers (and alternative healthcare providers) are an important,
convenient and cheap source of some health services especially in Visayas and Mindanao
and for the poor. Most of the services provided by traditional healers seem to
complement, rather than substitute, those by modem medicine and fill a gap in the
spectrum of health services demanded by consumers. It is necessary to recognize the key
role of traditional healers in serving the poor and incorporate them explicitly in health
Filipino Report Card on Pro-Poor Services 26
Chapter 11: Health
sector plans and programs by providing them appropriate training, information and
incentives.41
Medicines and Medical Supplies
53. The extent of self treatment, and the high expenditures on drugs and medicines,
especially in Balance Luzon and by middle-income households, calls for urgent action to
reduce the price of medicines (noted to be significantly higher in the Philippines than in
other ASEAN countries) and to improve the rational usage of drugs. The DOH has
begun to implement competitive international bidding procedures for procurement
supported by the World Bank with impressive results - for example, a 40% reduction in
the price of TB drugs. They have also attempted to break drug monopolies by importing
medicines from countries such as India, where the same patented drugs are sold for a
fraction of the price in the Philippines.42 It remains to be seen whether the attack on drug
prices will be sustained so that it is eventually reflected at the cash register in drug stores.
Improving rational use will call for better regulation and training of pharmacists as well
as improving access to information and education of consumers,43 both areas of
intervention that have so far received very little attention from the DOH.
Health Expenditures
54. The high share of (health expenditures in total household expenditure, especially
of the poor) out of pocket payments in total costs suggest that government health
expenditures should focus on the following: (i) increasing the production and
consumption (through improved quality) of primary health care (especially public health
and family planning) services, and (ii) making health insurance work more efficiently and
equitably and in particular, extending insurance coverage to the poor and self-employed.
The HSRA recognizes and includes both objectives. These are, however, precisely the
areas where the DOH is least equipped to exercise its will, as a result of devolution of
primary health care to local governments and the Health Insurance Law, which gives the
Philippines Health Insurance Corporation (PHIC) the mandate for managing health
insurance.
4' Admnittedly, the global experience to date with incorporating traditional healers in the delivery of
government health services has been mixed, although there have been instructive successes in East Asia.
For example, a Ministry of Health malaria detection program in Thailand incorporated traditional healers as
volunteers, after appropriate training. In comparison with paid outreach workers, the performance of the
traditional healers in case detection was assessed to be superior by an independent WHO evaluation. In
addition, the volunteers saved the governient considerable expense. See World Development Report,
1993, Chapter 5.
42 An issue for future consideration is whether parallel imported drugs will be subjected to full examination
on the basis of regulatory requirements in the Philippines, or they will be licensed automatically on the
basis of having fulfilled the regulatory requirements in the country of origin.
43 The Consumer and Oil Price Watch, a Manila-based NGO, in coordination with the Department of
Health, has launched a new initiative to monitor and compare the prices of locally manufactured branded
medicines versus generic ones. The objective is to raise public awareness that there are medicines available
locally that are of the same quality but more reasonably priced than branded drugs. This inforrnation will
be available on a website which can be accessed by the public.
Filipino Report Card on Pro-Poor Services 27
Chapter II: Health
55. The feasibility of implementing an expanded health insurance coverage to help
the poor and self-employed depends on a number of factors, including the ability of the
poor to pay for (affordability of) the insurance. One option is to persuade both the
national government and local government units to allocate greater amounts as
contributions to health insurance premiums on behalf of the poor as required by the
Health Insurance Law. Another option is to significantly increase enrollment of the non-
poor and those in the formal sector, and revenues from them, to enable cross-
subsidization from the non-poor to poor. Expanding enrollment will have to be preceded
by information and marketing campaigns, in part to address the low public perception of
the insurance program.44 In addition, PHIC policies ought to be revised to make them
more socially efficient, and tracked to assess their impact on the clients. Making health
insurance work for the poor remains a major challenge for the Health Sector Reform
Agenda.
8. THE GOVERNMENT HEALTH SECTOR REFORM AGENDA45
56. The HSRA is a comprehensive and well thought out proposal for fundamental
change in the health sector. If successfully implemented, it would improve the quality
and affordability of health care for the poor, while also improving the health system's
efficiency. Among the specific elements of the HSRA, which are supported by the
Report Card findings, that could make the country's health system more pro-poor are:
* Expanding health insurance coverage for the poor under the national health insurance
program.46
* Improving the quality of health care for the poor.47
* Improving the quality and accessibility of preventive care in public primary care
facilities. 8
* Reducing the cost of medicines49 and expenditures on hospital stays.50
44 Report card findings reveal that that most Filipino households get information about government health
services and programs from television (50%), followed by radio (34%), and friends and relatives (28%).
Only 12% of the households source health-related information from newspapers and the print media,
although this proportion is higher in NCR. These existing sources of information should be incorporated in
the proposed social marketing campaign to increase enrollment.
45 This section has been prepared by Teresa Ho, with inputs from the Report Card team.
46 According to the HSRA, this can be achieved by (i) increasing contributions from national and local
governments to subsidize insurance premiums for the poor; (ii) expanding membership of the non-poor to
allow greater cross-subsidies from the non-poor to the poor; and, (iii) increasing overall benefit levels
under the program to reduce out-of-pocket payments from members.
47 According to the HSRA, this can be achieved by (i) offering technical assistance and financial incentives
to local governments to improve public prinmary and secondary level facilities through the Sentrong Sigla
program; and, (ii) increasing the poor's access to better quality care in private facilities through the
expanded health insurance coverage.
4' According to the HSRA, tis can be achieved through multi-year budgeting of critical inputs for public
health programs including imnmunization, family planning, and TB control.
49 According to the HSRA, this can be achieved by (i) introducing price-control mechanisms similar to
those in practice in other countries; (ii) more vigilant monitoring of pricing practices (and taking
appropriate countermeasures such as parallel import of overpriced medicines); and, (iii) improved
procurement systems for publicly-procured drugs.
Filipino Report Card on Pro-Poor Services 28
Chapter II: Health
* Reducing the share of government resources going to tertiary- and higher-level
hospitals.5'
57. Financing the Reforms. Initial estimates of the investment cost for the HSRA for
the five-year period 2000-2004 totaled PhP1 12 billion (around US$2 billion) or an
average of PhP22 billion per year. This is nearly double the DOH's entire budget in
2000, and is almost certainly unaffordable under the present fiscal crisis. A lack of
resources will mean that clear priorities will have to be set among competing reform
programs, and it is important that pro-poor objectives receive priority. Specifically, the
limited funding should go first to (i) expanding insurance coverage for the poor; and
(ii) investing in improved primary care and prevention. Although there will be intense
pressure - especially from within the health system -- to channel the limited public
resources to hospital reforms, much of the "low-lying fruit" in hospital reforms can in
fact be harvested with minimal hospital investments.52
58. Leading the Reforms. Two changes introduced in the 1990s have significantly
diffused DOH's authority within the health sector: devolution and the establishment of
the Philippine Health Insurance Corporation (PHIC) as manager of the national health
insurance scheme. The DOH, which must now share governance responsibilities with
Local Government Units (LGUs) and the PHIC, needs to considerably enhance its ability
to lead, support and collaborate with these bodies. The recent re-engineering and
decentralization of DOH's central office in Manila, if followed through with investments
in its now streamlined and selected staff, would be a critical first step. Even more
daunting, governance skills suited to leading and implementing health reforms are needed
within the PHIC and the hundreds of LGUs that control increasing shares of health
expenditures in the country.
59. Phasing in the Reforms. Limitations in both financing and leadership dictate the
ways in which the HSRA can become a country-wide reality. While certain key policy
changes can and should take place immediately at the national level (in particular,
national health insurance and drug sector policy changes), the costliest parts of the reform
- investments in physical and human capital - will need to be phased in. The DOH plans
to introduce the "complete HSRA package" first in a limited number of "local health
zones," gradually increasing the number of participating health zones over time. This is a
reasonable and realistic approach, given the above limitations, and the need to first test
the HSRA package on the ground and learn practical lessons before going to full-scale
implementation. The manner in which phasing is done - the criteria for selecting
50 According to the HSRA, this can be achieved by expanding coverage of outpatient services under the
national health insurance program.
5' According to the HSRA, this can be achieved by granting financial autonomy to these hospitals and
requiring them to operate within the limits of their earnings.
52 This may be achieved through a combination of: (i) astute pricing and provider payment policies under
the national health insurance scheme; (ii) highly selective investments in only the most cost-effective and
affordable technologies for lower-level hospitals; (iii) financial autonomy for higher-level public hospitals
that allows them to keep their earnings, including earnings from national health insurance payments, but
requires them, in turn, to rely on these earnings to cover critical capital investments as well as operating
costs; and, (iv) extensive investments to improve hospital management skills at all levels.
Filipino Report Card on Pro-Poor Services 29
Chapter II: Health
participating health zones, the extent to which local governments contribute to the
transitional costs, the nature of investments made, etc. - will deternine whether the
HSRA indeed becomes the vehicle that, finally, delivers the quality care that has so far
eluded the country's poor.
60. Implementation of HSRA has only begun and it is important that the new
Administration maintain the momentum and, more importantly, steers the reforms on a
track that continues to favor the poor. This will be particularly challenging given the
scarce public resources available to finance the reforms and the limnited implementation
capacity in the health sector. One of the most important reasons that the new
Administration should continue to the implement the HSRA, albeit in a more focused and
phased manner, is that the client feedback presented in the Report Card clearly validates
the core elements of the HSRA. The voices of the users lend authority to the HSRA, and,
therefore, provide the new Administration a well-grounded basis for continuing with the
pro-poor reform agenda.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER III: ELEMENTARY EDUCATION'
1. POVERTY AND EDUCATION
1. Elementary school enrollment in the Philippines is almost universal, transitional
losses from elementary to secondary schools are quite low, and the combined gross
enrollment rate for these two levels, and tertiary education, exceeds that of Malaysia,
Hong Kong and even Singapore. These are impressive achievements, and yet a number
of studies have highlighted fundamental problems with the education system in the
Philippines.2 Two major concerns are the dropout rate in elementary education and low
student achievement. Of every 100 pupils who enroll in Grade 1 in public schools, 33
drop out before reaching grade 6; and a similar percentage of secondary school enrollees
drop out before completing four years of high school. Student achievement has been low,
particularly in mathematics and science. In the Third International Mathematics and
Science Assessment Study, for example, the Philippines ranked close to the bottom of 42
participating countries.3
2. Government is the major provider of basic education, with about 90% of school-
going children aged 6-12 years old enrolled in public elementary schools, and about 70%
of 13-16 year olds in public secondary schools. These numbers could be interpreted as a
reflection of both a highly successful effort by the govertnent to provide wide access to
education and a vote of confidence from consumers for public education. The Filipino
Report Card on Pro-Poor Services tests these assumptions, probing consumer views of
both public and private elementary education, comparing aspects such as access, use,
quality, costs, and participation through parent teacher's associations.
3. Access and use of education services by the poor is of particular concern in the
Philippines since there is a strong link between poverty status and educational outcomes.
Filmer and Pritchett,4 for example, showed that about 72% of the shortfall in universal
primary school completion is attributable to the shortfall of the poor. Poverty in the
Philippines is concentrated in rural areas, particularly Mindanao, and statistics confirm
vast differences between educational attainment in rural and urban areas and between
' This chapter has been prepared by Jayshree Balachander, with inputs from the Report Card team.
2PPhilippines Human Development Network/UNDP, 2000: Philippines Human Development Report, 2000;
Republic of the Philippines: Office of the President, 2000: Philippine Agenda for Education Reform: the
Presidential Commission on Educational Reform (PCER) Report.
3The Third International Mathematics and Science Test was administered in 1995 to 13-year old children
in 42 participating countries. The Philippines ranked 39h - fourth from the bottom. This dismal
performance was mirrored in the 1999 Intemational Mathematics and Science Test. Out of the 38 countries
that participated in this exam, the Philippines ranked 37t' - second from the bottom.
4Population and Development Review, 1999: The Effect of Household Wealth on Educational A ttainment.
Evidence from 35 Countries.
Filipino Report Card on Pro-Poor Services 31
Chapter III: Elementary Education
Mindanao5 and the National Capital Region (NCR), with drop out rates, for example, four
times higher in the forner than in the latter.6
2. THE SURVEY
4. The education module of the Filipino Report Card on Pro-Poor Services covered
the access, use, quality, cost, and participation7 aspects of public and private elementary
schools. There were separate modules for households with at least one child in the 7-12
age group,8 and for those with all children above the age of 12.9 The reason for including
two separate modules is to enable comparisons between present and past elementary
schools.
5. The survey results are analyzed by geographic area,10 urban and rural residence,
and by poverty status of households. The poverty measure classifies households into the
bottom 30%, middle 30% and top 40% based on household expenditure, referred to
hereafter as the poor, the middle-income, and rich, respectively.
3. USE AND ACCESS
6. Consistent with secondary data, elementary school enrollment is almost universal,
with more than 90% of children in the age group 7-12 years old enrolled in elementary
school. Of those enrolled, the overwhelming majority (88%) are in public schools (see
Table I below). There are however, significant locational and expenditure group
differences in the type (public or private) of school attended by children. Rich, urban
households, primarily in NCR, prefer private schools.
' In addition to economic reasons, the on-going conflict and apparent mismatch between traditional Islamic
education, favored by parent's in Muslim Mindanao, and formal education, taught in public schools,
explains the high drop-out rate and persistent absenteeism in Mindanao.
6Governnent of the Philippines, 2000: Education for All. Philippines Assessment Report.
7Through parent-teacher associations.
8Households with more than one child in the 7-12 years age group were asked to base their answers on the
experience of the eldest child. This ensured that the responses were based on the longest experience of the
household with elementary school.
9 Household with more than one child in the over 12 years age group were asked to base their answers on
the experience of the youngest child in this age group. This ensured that the responses were based on the
most recent experience (and hence, better recall) of the household with elementary school.
'° Geographical categories included in the survey are aggregate Republic of Philippines (RP), National
Capital Region (NCR), rest of Luzon (or Balance Luzon), Visayas and Mindanao.
Filipino Report Card on Pro-Poor Services 32
Chapter III: Elementary Education
Table 1: Enrollment in Present Public and Private Elementary Schools
(Percentage Enrollment by School)
Region/Area/Group Public School Private School
RP 88 12
NCR 65 35
Balance Luzon 91 9
Visayas 85 15
Mindanao 95 5
Urban 80 20
Rural 97 3
Bottom 30% 99 1
Middle 30% 94 6
Top 40% 76 24
7. Only 5% of households in Mindanao send their children to private school,
whereas 35% of households in NCR do so, followed by Visayas (15%) and Balance
Luzon (9%). Of urban households, 20% send children to private schools, while only 3%
of rural households do so. About one-fourth of rich households use private schools, but
only 1% of the poor households and 6% of middle-income households can afford to do
so.,
8. Access to both public and private schools has improved over time. In particular,
there is a significant reduction over time in the percentage of households reporting that
they had chosen a private school mainly because there was no alternative public school
available (see Table 2 below).
Table 2: Lack of Access to Alternative Elementary Schools12
RP Present Past
No Public School Available 4% 13%
No Private School Av 33% 37%
9. But, a significant number of households (33%) using public elementary schools
reported that they still do not have physical access to a private school. Of the households
frequenting public schools, lack of access to private elementary schools was reported by a
much larger share of poor households (42%) than rich (27%), suggesting that private
schools are less likely to be situated in areas where the poor live.
" The responses of households with children over the age of 12 years reveal almost identical shares,
confirming a clear bias of private education for rich, urban households, primarily in the National Capital
Region.
12 Households whose children attending private school were asked, "You said that your child is going to a
private school. Is this because there is no alternative public school your child can go to, or is there another
reason for going to private school?" Households whose children are attending public schools were asked a
similar question.
Filipino Report Card on Pro-Poor Services 33
Chapter III: Elementary Education
4. DROP-OUTS
10. While the vast majority of children in the Philippines, including those from poor
families, initially access the school system, a substantial proportion drops out
prematurely, without having acquired basic literacy and numeracy skills.'3 According to
the Report Card, about 10% of school-age children (7 to 12 years old) were not in
elementary school in March-April, 2000.14
11. About 40% of those not in primary school are in Mindanao (see Table 3 below)
compared to 11% in NCR, 14% in Visayas and 33% in Balance Luzon."5 A higher
proportion of boys are not in school, compared to girls.16 Similarly more rural children
are out of school, compared to children in urban areas, although urban households
outnumber the rural in the sample by 3 to 2.
Table 3: Distribution of Children Currently Not in Elementary School
Region/Gender/Location % of Children Not in School
RP 100
NCR 11
Balance Luzon 33
Visayas 14
Mindanao 41
Boys 62
Girls 38
Urban 43
Rural 57
12. Of the children who had dropped out of school before completing grade 6,17 about
60% dropped out in grades 4 and 5, confirming the high enrollment, late drop out model
identified by Filmer and Pritchett.18 The main reason reported for dropping out of school
was illness/physical disability.19 Economic reasons20 were the next most important,
followed by poor performance.21 This is consistent with the recommendations made by
the respondents for programs likely to be most effective in helping poor families keep
13 Poverty in education is defined as the failure to get an elementary education (Grades 1-6). The
education-poor would include all people of working age who did not complete Grade 6, as well as those
who reached Grade 6 but failed the standard elementary examination. Philippine Human Development
Report, 2000.
14 According to the 1990 census, about 18% of(l1.7 million) elementary school-age children (7-12 years)
were out of school.
i Compared with its share of households in the overall sample (23%), the proportion of school-age
children not in school in Mindanao is large at 41%.
16 According to the Philippines Poverty Assessment, The World Bank, 2000, "there is no evidence of
discrimination against girls in the provision of education; if anything, girls appear to receive more
schooling than boys, especially in rural areas."
17 In both the 7-12 and older than 12 cohorts.
18 Population and Development Review, 1999: The Effect of Household Wealth on Educational Attainment:
Evidence from 35 Countries.
19 This finding is new and deserves further exploration by sector specialists.
20 Expenses are too high or child is needed to help family.
21 Did not get passing grades.
Filipino Report Card on Pro-Poor Services 34
Chapter 111: Elementary Education
their children in school: free health care in school, full exemption from miscellaneous
fees, and more qualified teachers. There may also be a need to provide scholarships to
poor families, specifically targeted at boys in rural areas.22
5. SATISFACTION WITH ELEMENTARY SCHOOLS
13. Overall appreciation for public and private elementary schools was not
significantly different, although client ratings on specific aspects revealed an
overwhelming preference for private schools on quality aspects and public schools for
cost aspects. There was, however, a significant decline in client satisfaction with private
schools over time (see Table 4 below). Possible explanations for this decline are
explored later in this section. While client satisfaction with public elementary schools
has not changed over time, given the mediocre quality that is a hallmark of public schools
in the Philippines, this stagnation is not good news.
Table 4: Overall Satisfaction (Present and Past) for Public and Private Elementary Schools
RP Present Rating Past Rating
Public School 1.49 1.50
Private School 1.51 1.71
Verysatisfied:2; Somewhatsatisfied:1; Undecided:0; Somewhatdissatisfied:-l; Verydissatisfied:-2
14. Respondents were asked to rate satisfaction with specific aspects of public
elementary schools such as location and schedule; teacher attributes such as mastery over
subject matter, attitude, and attendance; and classroom attributes such as class size,
facilities and textbooks (see Table 5 below).
Table 5: Satisfaction with Specific Aspects of Present Public Elementary Schools
Class Text
Aspects Location Schedule Attitude Attendance Size Books Facilities Mastery Tuition
RP 1.64 1.24 1 .37 1.33 1 .02 1 .09 1.05 1.39 1.24
Very satisfied:2; Somewhat satisfied:l; Undecided:0; Somewhatdissatisfied:-l; Verydissatisfied:-2
15. Clients expressed most satisfaction with convenience of location, perhaps a
reflection of the successful implementation of the longstanding "one-barangay, one-
school" policy of the government. In contrast, public schools were rated most poorly for
classroom attributes such as class size, textbooks and facilities. These attributes result
directly from the poor management of public education expenditures by the Department
of Education, Culture and Sports (DECS) at the central and regional levels, and by local
governments.
16. Class sizes are large, for example, because of poor teacher deployment, and not
merely a shortage of teachers. The average student-teacher ratio is 35 students per
teacher for elementary schools, but these numbers are deceiving, since they represent
only aggregate ratios of the population of students and teachers. They do not represent
22 Philippines Poverty Assessment, The World Bank, 2000.
Filipino Report Card on Pro-Poor Services 35
Chapter III: Elementary Education
actual class sizes, which are more reflective of the learning conditions pupils confront.
Classes in public schools are, in fact, fairly large to very large, with average class size of
45 in public elementary schools.
17. DECS has a policy of providing free textbooks to all students in elementary
school.23 But these are procured and supplied exclusively by the government (national or
local), and cannot be purchased in the open market, even by those who can afford to buy
them.24 Facilities are built by DECS through the Department of Public Works and
Highways under the National School Building Program at a higher unit cost than at the
local government unit (LGU) level, although the Local Government Code has delegated
the function of building and maintaining schools to the LGUs. These three major areas of
client dissatisfaction with public elementary schools are discussed in greater detail in
Section 8.
18. Satisfaction ratings in the past with different aspects of public schools reveal
exactly the same patterns as those described above with present elementary schools.
Parents were least satisfied with class size, textbooks and facilities, and highly
appreciated the location of schools (see Table 6 below). It is cause for concern that
classroom attributes continue, over time, to be the greatest source of dissatisfaction to
clients in public elementary schools.
Table 6: Satisfaction with Specific Aspects of Past Public Elementary Schools
I I I I ~~~~~~~~~Class Text
Aspects Location Schedule Attitude Attendance Size Books Facilities Mastery Tuition
RP 1.55 1.28 1.34 1.32 0.99 1 .08 1.05 1.42 1.27
Verysatisfied:2; Somewhatsatisfied:l; Undecided:0; Somewhatdissatisfied:-l; Verydissatisfied:-2
19. Satisfaction with private schools on different aspects was assessed by households
whose 7-12 year olds are currently enrolled in private schools (see Table 7 below).25
Regularity of teachers' attendance elicited the highest rating, followed by convenience of
location and availability of textbooks. The lowest satisfaction rating was given to the
tuition charged by private schools.
23 The DECS target, in 1999, was to improve textbook to pupil ratio in elementary schools from 1:6 to 1:3.
According to a tracking survey undertaken by the Philippines Governance Forumn, a watchdog NGO, the
actual textbook to student ratio on the ground was 1:5. Government Watch, Summary Report, Philippines
Governance Forurn, June - July, 2000.
24 Informed observers note that this limitation is a recipe for corruption, and up to 50 percent of the
textbook budget is estimated to be diverted as a result of bribes and non-competitive bidding. Schools
regularly complain about shortage of textbooks, and substandard printing materials used in textbooks.
Philippine Daily Inquirer, March, 1999.
25 Households whose children attend private elementary schools were asked to rate these schools on the
same aspects as public school respondents were asked to rate public schools.
Filipino Report Card on Pro-Poor Services 36
Chapter III: Elementary Education
Table 7: Net Satisfaction with Specific Aspects of Present Private Schools
I I I ~~~~~~~~~~Class Text I
Aspects | Location | Schedule | Attitude Attendance Size Books | Facilities | Mastery | Tuition |
RP 1.45 1.38 1.26 1.60 1.36 , 1.43 1.13 1.28 0.66
Verysatisfied:2; Somewhat satisfied:l; Undecided:0; Somewhat dissatisfied:-l; Very dissatisfied:-2
20. Comparisons of satisfaction ratings for private schools in the past and present
show a marked deterioration for tuition,26 teachers mastery over subject matter, and
school facilities (see Table 8 below). In fact, the declining tuition ratings may be
explained, in part, by the parent's concern that they are paying more (higher tuition
fees)27 and getting less (poorer quality teaching and run-down facilities) in retum. The
lower rating in recent years for satisfaction with teacher's mastery over subject matter
should be of particular concem to private schools,28 as this has been their main source of
comparative advantage over public schools.
Table 8: Present and Past Satisfaction with Specific Aspects of Private Elementary Schools
Net Satisfaction Score
Aspects Present Past
1. Location 1.45 1.28
2. Schedule 1.38 1.33
3. Attitude 1.26 1.28
4. Attendance 1.60 1.43
5. Class Size 1.36 1.28
6. Textbooks 1.43 1.46
7. Facilities 1.13 1.43
8. Mastery 1.28 1.49
9. Tuition 0.66 0.75
10. Other Facilities 1.21 1.27
11. Ability of Administrators 1.38 1.44
12. Classmates 1.21 1.40
13. Transportation costs 1.11 1.13
Very satisfied:2; Somewhat satisfied:l; Undecided:0; Somewhatdissatisfied:-1; Verydissatisfied:-2
26 Anecdotal evidence from the stakeholder workshops indicates that there has been a rapid increase in
tuition fees in private schools over the past couple of years. Since tuition fees is the only source of income
of private schools, in part, the rapid increase may reflect an effort by private schools to raise resources to
retain/hire better teachers and improve facilities, which were identified by clients as major sources of
dissatisfaction.
27 Tuition in private schools was deregulated in 1998 as provided in BP 232, which states that a private
school may "determine its own tuition rate and other fee changes," after informing the concerned
government regulatory agency its plan to raise fees, but not before consultations with students and faculty.
A private school is also required to submit a certificate to the regulatory agency that revenues from the
additional fees would be spent according to the following: 70 percent for teachers' pay, 20 percent for the
school facilities, and 10 percent as return on investment." Philippine Daily Inquirer, March, 2001.
28 Anecdotal evidence from stakeholder workshops reveals that some of the best private school teachers are
leaving to join public schools due to the better salaries and benefits in public schools, which are a result of
substantial increases in salaries of public school teachers, at the expense of other education inputs, in each
post-Marcos Administration. In addition, if private schools are forced to hire new recruits and replacements
from the lower end of a pool of poorly prepared teachers, due to financial constraints, this is a matter of
serious concern for them.
Filipino Report Card on Pro-Poor Services 37
Chapter III: Elementary Education
21. Ratings were higher over time, on the other hand, for location of school, regular
attendance of teachers, class size29 and schedule. However, there were twice as many
declines in rating as opposed to advances, signifying that there has been a major drop in
consumer satisfaction with private schools over time.
22. Households who currently send their children to public elementary schools, and
who indicated they have access to an alternative private school, were asked to compare
fourteen different aspects of the two types of schools (see Table 9 below). Specifically,
these households compared their public schools with the alternative private school by
ranking the former as better, just as good, or not as good as the latter. The proportion of
these households falling under each of the three categories (i.e., better, just as good, and
not as good) is listed under the heading "Public" in Table 9.
23. Similarly, households currently sending their children to private elementary
schools, and who indicated they have access to an alternative public school, were asked
to compare fourteen different aspects of the two types of schools. Specifically, these
households compared their private school with the alternative public school by ranking it
as better, just as good, or not as good as the public school. The distribution of these
households is listed under the heading "Private" in Table 9.
Table 9: Comparative Ratings of Present Public and Private Elementary Schools
Aspects Better Just as Good Not as Good
Public Private Public Private Public Private
1. Mastery 17% 93% 43% 4% 38% 2%
2. Schedule 23% 73% 54% 24% 21% 2%
3. Attitude 23% 78% 54% 16% 21% 4%
4. Attendance 19% 73% 56% 24% 22% 2%
5. Ability 21% 76% 54% 20% 21% 4%
6. Class Size 15% 84% 34% 13% 50% 2%
7. Textbooks 21% 91% 31% 2% 46% 7%
8. Facilities 14% 78% 31% 13% 54% 9%
9. Other Facilities 14% 76% 35% 18% 49% 7%
10.Classmates 27% 67% 54% 27% 18% 7%
11. Tuition 86% 29% 7% 20% 7% 51%
12. Uniforns 71% 31% 21% 29% 7% 40%
13. Transport 72% 40% 21% 31% 6% 29%
14. Location 71% 64% 18% 9% 11% 27%
24. The results show that an overwhelming majority (67% to 93%) of households
currently sending their children to private elementary schools ranked the private school to
be better than the government alternative on the first ten aspects, which have a direct
bearing on the quality of services provided. On the other hand, a much smaller
percentage (14% to 27%) of households currently sending children to public schools
rated the public school to be better on quality aspects, compared to the private school.
29 The increase in client appreciation with class size over time may imply (i) number of teachers in private
schools is increasing; and/or, (ii) number of students is decreasing. Stakeholder feedback reveals that, at
the margin, private schools may be loosing both the best teachers, as well as some students. So, the higher
client rating with class size may not be a positive development for private schools.
Filipino Report Card on Pro-Poor Services 38
Chapter III: Elementary Education
25. Convenience of location (aspect 14 in Table 9 above) received a slightly more
favorable ranking for public schools. However, a majority of both groups ranked public
schools more advantageous than private schools on the three cost aspects (aspects 11 to
13: cost of tuition and miscellaneous fees, cost of uniforms and school supplies, and cost
transportation and allowance).
26. With respect to costs, an overwhelming majority of public school patrons (71% to
86%) thought public schools were better than private schools. In contrast, a smaller
percentage (29% to 40%) of households currently sending their children to private
schools rated the private school to be better on costs aspects.30
27. Overall, it is fair to conclude that private elementary schools are ranked superior
on quality aspects,31 and not as good as public schools on cost aspects. This is cause for
concern as it reveals that those who send their children to public elementary schools do
so only because they cannot afford the widely preferred private schools. A secondary
reason for sending children to public elementary schools may be factors relating to
physical access.32
6. HOUSEHOLD EXPENDITURE ON SCHOOLING
28. Although elementary education in public schools is supposed to be free, families
incur considerable costs sending children to public schools. Expenses include tuition and
miscellaneous fees, uniforms and school supplies, transportation and food allowance, and
costs of textbooks. Table 10 shows the costs incurred for each type of expense by region,
location and expenditure group.
30 As public schools are not supposed to charge tuition fees, the response of 29% of private school patrons
who thought private schools were better on this aspect deserves further explanation. It is possible that the
children of some of these respondents were recipients of scholarships in private schools. In addition, these
respondents may have built a cost effectiveness measure (cost plus quality) into their response. Finally, it
may be an acknowledgement of the reality that parents have to make regular financial contributions
(miscellaneous fees) even in public schools. To this end, some parents may prefer to pay higher, but
transparent, fees to private schools, as compared to meeting unofficial requests from public schools for
contributions on a sustained basis.
3l The differences in performance between public and private schools are, in part, an outcome of this
quality difference. The test scores of public elementary schools were 27 percent lower on average than
those of private counterparts in 1997. In addition, the quality gap between elementary public and private
education is evident from a comparison of the cohort-survival rates. Among private elementary schools in
1997-98, 87 percent of those who enrolled in grade I completed elementary school without being delayed
or dropping-out. By contrast, only 67 percent of enrollees in public schools managed to complete the
grades on time. See Philippines Human Development Networkl/UNDP, 2000: Philippines Human
Development Report, 2000.
32 Report Card findings reveal that 33% of households using public elementary schools reported that they
do not have physical access to an altemative private school. See Section 3 of this chapter.
Filipino Report Card on Pro-Poor Services 39
Chapter III: Elementary Education
Table 10: Annual Per Student Costs for Public Elementary Education (in PhP)
Region/Area/Group Fees Textbooks Uniforms Transport Total Median Total Mean
RP 445 38 522 1,017 1,228 2,023
NCR 353 76 808 2,249 2,435 3,485
Balance Luzon 332 62 575 1,000 1,263 1,968
Visayas 929 10 371 953 1,034 2,263
Mindanao 348 11 454 701 1,140 1,503
Urban 666 69 612 1,410 1,660 2,767
Rural 230 9 438 651 1,000 1,329
Bottom 30% 204 7 341 419 715 917
Middle 30% 325 17 405 794 1,541 1,200
Top 40% 757 84 785 1,706 3,331 2,065
29. Total schooling expenditures are twice as high in the NCR as in Mindanao; in
urban areas as compared to rural areas; and for rich households compared to poor
households. Moreover, median expenditures are considerably lower than mean
expenditures, indicating that the better off households (within each category) are
spending considerably more than the average.
30. Transportation costs are the largest expense for all groups, at about half of total
costs. Uniforms and school supplies are the second largest expense category (26%), and
account for a particularly high proportion of the expenditure of the poor (35%).
Expenditures on textbooks are very low (2%),33 as these are provided free by DECS.
31. Fees which are collected by, or on behalf of the public elementary schools, for
example, by PTAs,34 account for more than 20% of total school expenses. These are
particularly high in the Visayas, accounting for nearly half the total expenses, and
relatively low in NCR, at only 10% of a household's total costs for sending a child to a
public elementary school. In both Mindanao and Balance Luzon, fees account for about
20% of total school expenses, which is close to the national average. While public
schools are expected to charge a few mandated fees, such as for matriculation, these are
supposed to be exempted from tuition fees. To this end, the relatively high fees
component of school expenses, especially in the Visayas, deserves to be probed further.35
32. Average private school costs (at PhP20,658 per child per school year) are nearly
ten times as high as public school costs (PhP2,023), making them relatively unattractive
for most Filipinos, except those whose income is large enough, and/or those who put a
high premium on quality of education. In relative terms, private elementary education
costs households about 7% of total household expenditures on average per child (see
Table 11 below). The ratio is considerably higher for the middle-income group (16%)
33 Parents expressed low satisfaction with the availability of textbooks in public schools, presumably
because DECS prescribed textbooks are not available in book stores and cannot be purchased in the mnarket.
34 About 50% of PTA members of public elementary schools indicated that these associations were focused
on fumd-raising activities.
35 Full exemption from miscellaneous fees was identified by the respondents as the most important
mechanism for ensuring that children from poorer families do not drop-out of school. Special dispensation
from school fees for the poor, especially for primary and secondary schools, was also identified as a
priority by the World Bank's Philippines Poverty Assessment, 2000.
Filipino Report Card on Pro-Poor Services 40
Chapter III: Elementary Education
than for the rich (6%).36 In comparison, the cost of public elementary schooling per year
per child is about 2% of total household expenditures, and is similar across all
expenditure groups.37
Table 11: Share of Per Student Cost of Schooling in Total Household Expenditures
Public Private
Poverty Group Mean Median Mean Median
RP 2% 1% 7% 8%
Bottom 30% 2% 1% * *
Middle 30% 2% 1% 16% 9%
Top 40% 2% 1% 6% i%
* too few observations
33. Whether in absolute or relative terms, the cost of private elementary education is
several times higher than the cost of an elementary education in a public school.
Therefore despite recognition of better quality education in private schools, most parents
chose to send their children to public schools. Private schools are largely out of the
financial reach of poor households38 and put a considerable burden on middle-income
households, who are willing to pay for these services. Unsurprisingly, private elementary
schools are mostly patronized by the urban rich, especially in NCR.
7. PARENT-TEACHER ASSOCIATIONS
34. Parent-teacher associations (PTAs) are considered an important mechanism in the
Philippines for parent participation in education. The survey included a number of
questions designed to throw light on the prevalence of PTAs, and the extent of parents'
participation and influence in them. The survey confirms that PTAs are indeed
widespread, with virtually one in every public elementary school in the country.39
Prevalence of PTAs has increased over time, with parents of children above 12 years of
age reporting PTAs in only about 89% of schools. However, membership in the PTAs
remains unchanged at only about two-thirds of all households whose children are enrolled
in public elementary school. Table 12 shows the change in participation in PTAs over
time by different expenditure groups.
36 This confirms the Report Card finding in the health sector that sometimes middle-income households
spend a disproportionately large share of their expenditure on social services, because they are either
excluded from subsidized services, or are reluctant to seek them because of the stigma attached to them.
37 As mentioned earlier, better-off households appear to be spending more than the average for sending
children to public schools. For example, Report Card findings indicate that PTAs may be using an equity
criteria in collection of miscellaneous fees, collecting more from those who can afford to pay.
38 Assuming that the average annual income of a household, with three children of elementary school-age,
is PhP60,000, then the cost of sending the three children to a private school exceeds the household income.
39 Report Card findings reveal that 98% of public elementary schools presently have PTAs.
Filipino Report Card on Pro-Poor Services 41
Chapter III: Elementary Education
Table 12: Public Elementary Schools: Participation in PTAs
Member of PTA
Poverty Group Past Present
RP 69% 68%
Bottom 30% 67% 77%
Middle 30% 65% 62%
Top 40% 73% 69%
35. Membership from poor households is surprisingly strong with more than three-
fourths of households enrolled in the PTAs. Moreover, participation by this group has
increased markedly from the past (from 67% to 77%). Participation by the middle and
upper income groups, on the other hand, appears to have declined slightly.
36. About half the public school respondents indicated that their PTAs met regularly,
while the other half stated that they met as needed. The percentages were not
significantly different in the present than in the past. An overwhelming majority of
respondents (87%) who were members said that PTAs in public schools represent their
views either very closely or somewhat closely (see Table 13 below). Almost all of the
poor households (99%) said that the PTAs closely represented their views. This is a
significant improvement from the past, when only 88% of poor households said that the
PTAs represented their views. Clearly, the poor are better represented and have
deepened their voice in the functioning of PTAs over time. On the other hand, influence
of the better-off households in PTAs has not improved over time.
Table 13: Public Elementary Schools: Extent to which PTAs Represent Views
=j Very Closely/S mewhat Closely Only Slightl r Not at All
Poverty Group Present Past Present Past
RP 87% 88% 13% 12%
Bottom 30% 99% 88% 1% 12%
Middle 30% 88% 88% 12% 12%
Top 40% 86% 86% 14% 14%
37. Respondents considered that the PTA activities were equally focused on
education and fund raising activities (see Table 14 below). On the whole, respondents
thought that fund raising activities had marginally increased in importance over time, but
this perception varied by expenditure group. Interestingly, the responses of poor
households and rich households moved in opposite directions, with the former saying that
education activities had become more important now than in the past, while the latter
shared that fund raising had increased over time. It is possible that PTAs target those
who can afford to contribute or raise more (e.g., the rich) for fund-raising.
Filipino Report Card on Pro-Poor Services 42
Chapter III: Elementary Education
Table 14: Public Elementary Schools: Activities of PTAs
Education Activities Fund Raising Others
Poverty Group Present Past Present Past Present Past
RP 51% 52%' 47% 44% 2% 4%
Bottom 30% 60% 56% 38% 41% 2% 5%
Middle 30% 49% 49% 49% 45% 2% 6%
Top 40% 46% 51% 52% 47% 2% 2%
38. PTA members were also asked how much influence the PTA had on the school's
academic program (see Table 15 below). About half the respondents felt the PTAs had
much influence. Another 40% thought they had some. Only 10% thought they had no
influence. Consistent with other responses, the poor felt the degree of influence of PTAs
on the school's teaching program was growing, while the rich thought it was diminishing.
Table 15: Public Elementary Schools: Influence of PTAs on Teaching Programs
Much Influence Some Influence No Influence
Poverty Group Present Past Present Past Present Past
RP 51% 49% 40% 40% 9% 11%
Bottom 30% 63% 55% 28% 37% 9% 8%
Middle 30% 54% 46% 38% 42% 9% 12%
Top 40% 40% 47% 52% 40% 8% 13%
39. PTAs are relatively less prevalent in private schools with only 83% reporting the
presence of a PTA, as compared to 98% of all public schools. However there has been a
marked improvement in the private schools, up from only two-thirds of all schools in the
past reporting a PTA presence. Moreover, a larger percentage of private school parent's
(72%) were members of the PTA, compared to public school parents (68%).
40. There is no significant difference in the regularity of PTA meetings between
private and public schools, as well as the extent to which PTAs represent the views of the
members. A major difference in the public and private school PTAs is in the nature of
activities, which are the focus of PTAs. Fund raising is not a major activity of private
school PTAs, which is understandable, given that the parents are paying hefty fees, in
most instances, in these schools. More than two-thirds of the respondents stated that
education was the primary activity of the PTAs in private schools. In comparison, only
half of the respondents stated that education was the primary activity of public school
PTAs. As with public school parents, a majority of private school respondents felt their
PTAs had considerable influence on the teaching programs in schools.
8. KEY FINDINGS AND RECOMMENDATIONS
41. The main findings are as follows:
* Access to both public and private schools in the Philippines has improved over time,
with access to public schools being very high for all socio-economic groups. As
expected, private schools are more likely to be located where the better-off live.
Filipino Report Card on Pro-Poor Services 43
Chapter III: Elementary Education
* Elementary school enrollment is almost universal, with an overwhelming majority of
students (88%) enrolled in public schools, due to low costs and high physical access.
* Although most children enroll in elementary school, a significant proportion drops
out. Most of the drop-outs (about three fourths) belong to poor households, and those
located in rural areas and Mindanao. Poor health/disability and economic reasons
(school expenses or need for child to work) are the principal reasons for dropping out.
* Satisfaction with public schools overall has remained the same over time. On the
other hand, there has been a sharp decline in the level of satisfaction of parents whose
children went to private schools. The decline is related to increases in tuition, a
perception that teacher's performance has deteriorated, and dissatisfaction with
school facilities.
* Public school patrons were most satisfied with location and least satisfied with class
size, availability of textbooks and school facilities. There has been no change over
time in this regard.
* Private school patrons were most satisfied with the regularity of teachers' attendance,
location of school and availability of textbooks. They were least satisfied with the
high tuition charged by private schools.
X An overwhelming majority of private school patrons and a significant proportion of
public school patrons agreed that private schools were better than public schools on
quality aspects. Both rated public schools higher on costs and location.
- Although public education is supposed to be free, households spend about 2% of total
household expenditures on each child in a public elementary school. Transportation
accounts for about half of these expenses, uniforms for about a quarter, and a fifth is
spent on fees. Since public schools do not charge tuition, these costs relate largely to
miscellaneous fees, and are especially high in the Visayas.
- Private schools cost about ten times more on average than public schools putting
them out of reach of the poor and most middle-income households. Mainly, rich,
urban households, primarily in NCR, patronize private schools.
* PTAs are widely prevalent in public schools (98%) and about two-thirds of parents
are members. Participation of the poor has improved over time and is currently even
higher than average (about three-fourths of poor households are PTA members). The
poor feel well represented in PTAs. Public school PTAs are equally concerned with
both education and fund raising, and members feel they have considerable influence
on the teaching programs.
* Private school PTAs are also widespread (83%) and their numbers have increased
significantly from the past. PTAs are mostly concerned with education activities and
members feel they have considerable influence on the teaching programs.
42. These findings have the following implications/demand the following response.
Drop-out Prevention
43. The focus on successful completion of elementary primary school by all eligible
children is clearly a high priority in the government's fight against poverty. Yet, there is
evidence of widening differences in educational quality between the more prosperous and
Filipino Report Card on Pro-Poor Services 44
Chapter III: Elementary Education
poorer areas in the Philippines, and an inequitable distribution of essential education
inputs among the various regions and between rural and urban areas.40
44. The government in recognition of this fact, approved a major donor-financed
project, the Third Elementary Education Project (TEEP) in 26 of the poorest and most
backward provinces (see Box 1 below). In addition, the "Adopt-A-School" program of
DECS has received more than 100 pledges from various corporations and foundations to
build classrooms and libraries, sponsor scholars, and repair run-down facilities in
disadvantaged locations. However, in the long run, this problem can only be addressed
by a coherent DECS strategy for actively targeting resources for the most pressing needs
and towards the most excluded areas.
Box 1: The Third Elementary Education Project
The core principle (of the project) is to target resources on 26 poor provinces, communities and schools.
The project would develop and implement, on a phased basis, locally prepared, custormized Divisional
Elementary Education Development Plans (DEDPs) in the 26 provinces. With local variations, the DEDPs
are expected to (i) improve learning through the provision of textbooks and other instructional materials;
(ii) in-service training of teachers and school managers; and (iii) grants from a School Improvement and
Innovation Facility to finance these. It is expected to raise completion rates through the provision,
rehabilitation and repair of fully equipped small multi-grade schools, conmmunity mobilization for the
improvement of schools and schooling outcomes, and demand-side interventions.
Source: World Bank, Third Elementary Education Project: Project Information Document.
45. Economic reasons such as actual41 and/or opportunity costs of sending a child to
school also have to be addressed. While extremely high from the perspective of a poor
client, these costs are relatively modest in the aggregate, and there is certainly a case for
implementing a pilot program in the worst affected areas. Some NGOs are already doing
this with considerable success by providing scholarships,42 school feeding programs and
in-school health care to poor children.
40 Republic Act 7880 (Providing for the Fair and Equitable Allocation of DECS Budget for Capital Outlay)
provides the following two major criteria for resource allocation: (i) 50% of total capital outlay to be
allocated pro-rata according to each legislative district's student-population in relation to the total student-
population of the country; and, (ii) 40% of the capital outlay allocated only among those legislative districts
with classroom shortages as defined in Section 3(b). While the favoring of districts with big student
population is quite understandable, it is hardly equitable. For example, the Act does not consider the
children who should be in school, but are not. In fact, the regions with low incidence of poverty are the
ones with higher share of student population. With respect to the second criterion, the Act defines
classroom shortages as a class size of 45 students to a classroom. Again, a majority of provinces without
classroom shortage (on paper, at least) turn out to be those with a high poverty incidence. Thus, taken
together, the two criteria of this Act are biased against poor provinces, where the need for education inputs
is the greatest. See Approaches to Targeting the Poor, Arsenio M. Balisacan, et.al., Final Report prepared
for NEDA, 2000.
41 Respondents, whose children had dropped out, identified high expenses as an important cause. To this
end, clients recommended that children of poor families should be given full exemption from miscellaneous
fees charged by schools.
42 For examnple, the Ayala Foundation has been providing free education to poor students in Tondo and
Batangas. In addition, students are provided transportation allowance and two meals a day. The Ayala
Filipino Report Card on Pro-Poor Services 45
Chapter III: Elementary Education
46. Disabilities are another important reason keeping children out of school. Children
with disabilities are an under-served group in most developing countries, and Philippines
is no exception. There are direct economic and social benefits to increasing the school
participation of children with disabilities. The government's "Education for All" policy
framework states that children in difficult circumstances, such as those with physical
disabilities, will be targeted for focused attention. However it is not clear how
widespread or effective these efforts have been to date. Orientation or training of
teachers and updating the teacher education curriculum are possible interventions in this
regard.
Better Use of Public Resources
47. The three main sources of client dissatisfaction with public elementary schools
relate to class size, lack of textbooks and poor school facilities. Each of these is
discussed below.
48. Class size: DECS has a total of about 450,000 staff, mostly teachers. Yet
average class size in the Philippines (45) is much higher than the average teacher to
student ratio (35), suggesting that a substantial proportion of the teaching force is
diverted away from teaching duties to perforn clerical or administrative functions. Large
disparities in staffing provisions exist among school divisions, possibly a result of the
constraints imposed on the reassignment of teachers by the Magna Carta for Public
School Teachers. There is widespread and persistent deviation between reported and
actual school staffing, so it is impossible to quantify the overall loss in teaching time.
Reforming teacher deployment is therefore a high priority for DECS.
49. Textbooks: The share of the budget devoted to textbooks has been negligible,
estimated at about PhP1O (equivalent to about 20¢ US) per student. This budget buys
only half a book whereas the prescribed number of books is about 8 per elementary
school student. A 1995 Act deregulated the provision of textbooks transferring
responsibility for their production from the government to the private sector. However,
the implementation of the Act has been very weak leading to a three-fold increase in
costs and resulting in the production of books narrowly targeted at meeting the minimal
requirements of the Philippines Elementary Education curriculum prescribed by DECS.
50. Hardly any books were purchased for several years, as there were apparently few
local publishers capable of printing large quantities of textbooks,43 leading to a severe
deterioration in student to textbook ratios. To mitigate the crisis, and as a temporary
measure, the World Bank is currently financing the purchase of about 50 million
textbooks through international competitive bidding. This has resulted in considerable
cost savings and in better quality books. However, the books will be available in schools
only in the next school year. Currently, large scale and centralized injection of textbooks
into the system occurs with minimal feedback from stakeholders. Moreover, there is no
Foundation plans to set up 100 such CENTEX (Center for Excellence in Public Elementary Education)
schools all over the country.
43 Government Watch: Summnary Report, Philippines Governance Forum, June - July 2000.
Filipino Report Card on Pro-Poor Services 46
Chapter III: Elementary Education
reliable system tracking delivery, use and book life. Further, there is no measurement of
educational impact or attention to financial sustainability. This must give way to a
gradual decentralization, with mechanisms for feedback. Simultaneously, reliable book
tracking should be put in place and the impact of the materials on student achievement
and teacher effectiveness should be measured objectively and reliably, with exposure to
international best practice and financial sustainability planning. For example, parents
who can afford, would probably be willing to pay for books, in order to ensure that these
are available to their children. In any event, the problem of not being able to purchase
books in the open market when they are not supplied by the government certainly
deserves to be addressed.
51. School Facilities: The fragmented implementation of the school building and
maintenance program, currently carried out by multiple agencies, such as the DPWHI
(National School Building Program), DECS (special donor-funded projects) and local
governments (as mandated in the Local Government Code), has resulted in instances of a
single school having three separate classrooms on three separate foundations in three
different styles.44 Under the National School Building Program, the price paid to
contractors per classroom is fixed and equal in all parts of the country. As a result,
schools in difficult locations are often left incomplete. There is no reliable inventory of
school buildings or their condition. A reliable school mapping and inventory system and
a coherent policy for the financing and implementation of school construction and
maintenance by LGUs should be developed.
52. While current budget appropriations alone may be insufficient to meet DECS
needs, what is really at issue is the cost-effectiveness of these expenditures. Private
schools in the Philippines are widely considered to be more cost-effective than public
schools. 4 In the long run, cost-effectiveness of public schools has to be improved by
improving the internal efficiency of the system.
Assistance for Private School Participation
53. The preference for private schools over public was widespread in the households
surveyed, but was unaffordable to most households, especially the poor. Social targeting
could potentially enable youth from lower income households to attend private schools.
Experience from Govermment Assistance to Students for Private Education (GASTPE), a
prograrn designed to help students attend private high schools and colleges can be
instructive in this regard. GASTPE consists of two programs - Education Service
44 Similarly, a tracking survey undertaken by the Philippines Governance Forum, a watchdog NGO,
reported a "completed" school constructed in Leyte with only one wall. It appears that most schools with
unfinished buildings tap the PTA for completing the construction. Thus, the parents, including the poor,
end up paying for the public sector's inefficiency. Government Watch: Summary Report, Philippines
Governance Forum, June - July 2000.
45 The World Bank's Education Financing and Social Equity Report (1996) shows that while unit costs are
higher in private than in public elementary schools, private schools are more cost-effective as a result of
better internal efficiency as measured by repetition, drop out and completion rates and a higher quality of
education, as measured by learning achievement.
Filipino Report Card on Pro-Poor Services 47
Chapter III: Elementary Education
Contracting (ESC) and Tuition Fee Subsidy (TFS). ESC is designed to enable students to
enroll in a private school where no public school exists or where there is excess
enrollment in public schools.46 TFS is designed to help students cover fees charged by
private elementary schools. The average ESC subsidy in 1998 was PhP1,700 and the
TFS paid a maximum subsidy of PhP290 per grantee. These subsidies are only
approximately 10% and 1% of the annual private school cost, rendering them ineffective
for students from poor households as the subsidy is too small to make it affordable for
them. In addition, recipient private schools face problems of delayed releases of
subsidies from the government. Further, a survey of ESC beneficiaries showed that the
reported educational attainment of parents was significantly higher than the average for
low-income households, which seems at odds with the reported income profile of the
beneficiaries. If GASTPE is to benefit the poor, the selection of beneficiaries ought to
rely on an effective means-testing mechanism and would require a higher level of
subsidization.47
Arresting Decline Of Private Schools
54. The sharp deterioration in client satisfaction with private schools suggests that
there will be a slowdown in the growth of private school enrollment unless efforts are
made by these schools to arrest rapid tuition increases, and invest in teacher training and
quality of teaching staff, as well as in physical facilities. The deregulation of fee
increases in private schools since 1998 has probably weakened the incentives to ensure
cost-effectiveness.
55. The policy of free public secondary education adapted by the government in 1987
led to a significant slowing down in the growth of private secondary schools. If the
private sector fails to take necessary action to maintain a significant efficiency and
quality advantage over the public sector at elementary level, further flight from the
private school system can be anticipated. According to stakeholder feedback, this is
already happening in some private schools in NCR. The significant decline in private
schools may be bad news for public schools, too, as it puts additional pressure on already
strained resources.
PTAs
56. According to the Philippines Human Development Report, 2000, "the most
radical and effective reform that can be proposed to break the impasse of basic public
education is to empower local communities, and their representatives, so they can claim
for themselves the amount and type of education they want, instead of being prescribed
from above." To this end, the best news from the survey is that PTAs are potentially a
powerful mechanism for involving the poor in education. They are not only widely
4' Enrollment of government-funded poor students in private schools could also decrease the pressure on
the government to construct additional school facilities.
47 The enrollment of government-funded poor students in private schools would also increase the income of
these private institutions.
Filipino Report Card on Pro-Poor Services 48
Chapter III: Elementary Education
prevalent, but are patronized heavily by poor households, and are seen to be
representative of them.
57. PTAs could provide a forum for strengthening parent support to ensure primary
school completion and minimize financial burden on poor households. They could
potentially become a powerful source of parent education and thereby a means of
breaking the vicious cycle of intergenerational consequences of limited or no parental
48
schooling. PTAs could also act as a watchdog for making service delivery more
effective.49 In short, PTAs represent valuable "social capital" in the Philippines, which
could contribute to making elementary schools more accountable, responsive and results-
oriented.50
48 Children who drop-out of school tend to be those of poorly educated parents. In 1997, 29 percent of
fathers and 28 percent of mothers of drop-outs never cormpleted primary school, while 62 percent of fathers
and 63 percent of mothers never finished high school. In addition, 75 percent of the poor lived in
households where the head had no more than an elementary education. Taken together, these two facts
indicate that children of poorly educated parent's are condemned to a life of poverty and inadequate
education themselves; a life which they are likely to pass onto their own children. Philippines Human
Development Network/UNDP 2000: Philippines Human Development Report, 2000; Philippines Poverty
Assessment, The World Bank, 2000.
49 In this role, PTAs could help track whether resources and inputs intended for local schools (teachers,
textbooks, school facilities and equipment, etc.) are reaching those they are intended to benefit.
50 Jimenez, Emmanuel and Yasuyuki Sawasa. 1998. "Do Community-Managed Schools Work? An
Evaluation of El Salvador's Educo Program." Impact Evaluation of Education Reforms, Paper 8.
Development Research Group, World Bank, Washington, D.C.; Jimenez, Emmaunuel and Vincent Paqueo.
1996. "Do Local Contributions Affect the Efficiency of Public Primary Schools?" Economics of
Education Review 15(4) :377-86.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER IV: WATER SUPPLY'
1. POVERTY AND POTABLE WATER
1. Ensuring equitable and efficient access to water supply and sanitation services has
been a major challenge facing policy makers in the Philippines for several decades. The
situation has been aggravated by population migration from rural to urban areas, caused,
among others, by the poor searching for income and employment; and through natural
increase in the urban poor population. Typically, these households trade-off the
prospects of earning a livelihood in the urban informal sector with appalling living
conditions in low-income settlements.
2. Access to safe water and sanitation services is particularly a concern in urban
areas, because the density of population limits the availability of well water as an
alternative in adequate quantity and acceptable quality. The absence of a well-
functioning sanitation system pollutes both surface and ground water, and exposes
residents (particularly small children) to fecal contamination throughout the
neighborhood.2 As many of the urban poor live in poorly drained slums, flooding during
the typhoon season further aggravates public health risks.
3. The situation in rural areas is similar to urban centers, in that existing publicly
funded water supply facilities are far fewer than the growing demand. The rural poor
often have to depend on alternative untreated sources of water supply, such as springs,
rivers and ponds that are away from their homes. Women in particular, spend
considerable time and energy fetching water from these sources.
4. Improvements in water supply and sanitation benefit the poor in many ways.
They reduce the risks of exposure to various common illnesses, such as gastrointestinal
illnesses including diarrhea, cholera, typhoid, and dengue fever; they free up the time of
homemakers, most of whom are women, and they reduce child and infant morbidity.
However, these improvements can have greatest impact only if the institutional
arrangements3 ensure that the poor receive the intended benefits. In the Philippines,
where less than half the population has access to safe water supply, the risks of the non-
poor capturing most of these benefits are extremely high.
' This chapter has been prepared by Vijay Jagannathan and Mariles Navarro, with inputs from the Report
Card team.
2 Although reliable data on sanitation coverage is not available, only about half of the urban population is
thought to have toilets in their homes, with poorly constructed septic tanks to collect the human waste. The
rest (which includes most of the urban poor) rely on communal facilities and watercourses. Only about a
tenth of Metro Manila residents are provided with safe sewerage services, with the rest of the human waste
generated in Metro Manila and other secondary cities finding its way untreated into rivers, canals, drains or
even the underground water aquifer that provides drinking water to the same populations.
3 See endnote on key water sector institutions.
Filipino Report Card on Pro-Poor Services 50
Chapter IV: Water Supply
Water Service Levels
5. In 1995, the NEDA Board, the highest policy making body of the government,
defined three water service levels, in terms of development of sources, distribution
systems and management arrangements deemed appropriate to different areas. These are:
* Level I (point source) is a protected well or a developed spring with an outlet but
without a distribution system; generally adaptable for rural areas where houses are
thinly scattered. These services are mostly managed by community-based
organizations, which are also responsible for operation and maintenance.
* Level II (communal faucet system or stand posts) is a system composed of a source, a
reservoir, a piped distribution network and communal faucets. These piped systems
require more capital investments than level I systems, and more resources for
operation and maintenance. They are either maintained by community-based
organizations or by staff of the municipality.
* Level III (waterworks system or individual household connections) is a system with a
source, a reservoir, a piped distribution network and household taps. These systems
require substantial investments, and professional management (as a water utility) in
order to provide the designed level of service. Level III systems are managed by (i)
autonomous Water Districts established under Presidential Decree No. 198; (ii)
private concessionaires or licensees; and, (iii) water departments of cities and
municipalities, or Local Government Units (LGUs). Water Districts and private
operators meter all connections from the piped network, and charge tariffs that
recover the costs of service provision (including amortization of loans). Municipal or
LGU-managed systems usually subsidize the services to customers.4
Government Policies for Water Supply
6. In the past three decades, government policies have generally focused on the
preventive aspects - on how to safeguard densely populated, low-income urban residents
and village communities from major epidemics such as cholera, typhoid, and dengue
fever. Water supply and sanitation services were viewed as "basic needs" that should be
provided by the State for the poor. The focus on preventive aspects implied that services
4 Systems with poor operational performance (which turn out to be unsustainable in the long-term) could
occur in all three levels of water supply service, depending on both construction quality and the
effectiveness of operations and management (O&M). These issues are particularly relevant for level III
systems, which require considerably more O&M, and consequently are sensitive to the type of
management. Level III systems require professional management, and so they could, in actual practice,
provide unreliable and inadequate water supply whenever management is not handled professionally. A
priori, a privately managed level III system should be run on commercial principles. The performance of
level III systems managed by Water Districts vary significantly depending on the members of their
respective boards of directors, who are nominated by the local chief executives. In contrast to privately
managed systems and Water Districts, LGU-managed systems are more susceptible to political interference
in tariff setting because these systems are under the direct control of mayors.
Filipino Report Card on Pro-Poor Services 51
Chapter IV: Water Supply
were provided on the basis of what planners considered to be minimum necessary
services.
7. Past Administrations have sought universal access to safe and reliable water as a
medium-term goal. This was in keeping with the national thrust of poverty alleviation.5
This national goal was to be achieved through numerous national investment programs
financed by both national and aid (donor) resources.
8. The preoccupation of national planners - with the support of all donors through
the International Drinking Water and Sanitation Decade program - with extending
coverage in the 1970s and 1980s resulted in a bias toward level I and level II systems in
areas where full cost recovery was considered difficult to accomplish through the
establishment of water utilities. In these systems, the planners decided on technologies
and organizational arrangements,6 including the level of service for the different
areas/groups, and cost recovery strategies for the selected service level. For exarnple, in
level I service, households and community groups were to be responsible for operation
and maintenance (O&M) costs only; for level II, capital costs, in addition to O&M costs,
were to be recovered through community groups; and in level III systems, metering and
full cost recovery tariffs were encouraged, though not always enforced.7
9. The primary criterion for a community to receive level III service was population
density. Using this criterion, piped water supply, with a house connection -- which
theoretically should provide the most reliable, cost-effective service, not only in terms of
convenience but also in terns of safe potable water supply to households -- depended on
where a person lived, rather than on what the person wanted and was willing to pay.
10. In 1995, about 63% of the urban population was being served by safe water
supply.8 It was estimated that the investment requirements to increase coverage for the
urban population from the 63% in 1995 to 84% by 2000 (or to expand coverage to an
additional 20 million Filipinos, which was the target for 2000) was $2 billion. The Asian
Financial Crisis had adversely affected the ability of the national government and donors
to provide anywhere near the estimated amount to the sector, and the coverage today is
not much higher than that in 1995.
5 Also, it is in accord with the need to fulfill international commitments of promoting economic
development with improvement in quality of life.
6 In the 1980s, sector programs funded by donors introduced participatory approaches in the management
of water supply systems, although this demand-driven approach needs to be further strengthened and
upscaled.
7In LGU-managed systems, tariff-setting decisions are based on political considerations, and it is not
uncommon for municipalities to subsidize even operational costs from municipal budgets.
8 In the past, DILG, DPWH, LWUA and DOH used to be all involved in providing coverage figures for
water supply and sanitation, in some cases using different definitions for coverage. Upon the devolution of
the functions to the LGUs however, the monitoring of water supply and sanitation coverage is in disarray.
Although the primary responsibility for monitoring water supply and sanitation coverage rests with DILG,
the agency has been overwhelmed by budgetary constraints, as well as transitional problems. Reliable data
for rural areas is not available, but the coverage is significantly lower.
Filipino Report Card on Pro-Poor Services 52
Chapter IV: Water Supply
11. Further, within this coverage, which falls short of the target for 2000, the access
of the poor to safe water supply and sanitation is considered to be woefully inadequate.9
The Filipino Report Card provides an opportunity to verify the qualitative and
quantitative dimensions of how the poor have fared in the access to potable water, based
on their own feedback.
2. THE SURVEY
12. A total sample of 1,200 households nationwide was surveyed in the Filipino
Report Card in March - April 2000. Survey responses were analyzed by geographic
area,") by rural and urban residence, and by one measure of poverty status of households.
This poverty measure is based on household expenditure (expenditure poverty) and
classifies households as: poor covering those in the lowest three expenditure deciles (or,
bottom 30%); the middle-income households that fall in the fourth to sixth expenditure
deciles (or, middle 30%); and, the rich that are placed in the top four expenditure deciles
(or, top 40%).
3. ACCESS
13. The Report Card results indicate that only about 64% of the population is
receiving water supply services from level I, II or III systems (see Table I below). About
one-third of the population (34%) is reported to be relying on self-provisioning"1 as the
main source of their water supply, and a small minority (3%) on vendors. Despite
government policies aimed at achieving universal coverage of safe water supply services,
the client feedback indicates that about 37% of the population continues to be without
formal coverage.
9 This is widely accepted within the government, informed circles, and the donor community.
'° Responses analyzed by geographic area include aggregate Republic of the Philippines (RP), National
Capital Region (NCR), rest of Luzon (or Balance Luzon), Visayas and Mindanao.
" Self-provisioning may come in the form of own wells with pumps and fully reticulated household
systems devised by the rich and point sources such as wells, hand pumps, and rainwater collectors used by
the poor.
Filipino Report Card on Pro-Poor Services 53
Chapter IV: Water Supply
Table 1: Coverage of Households by Service Level12 of Main Source Water Supply Systems
(Percentage distribution)
Region/Area/Group Level III Level II Level I Self-provisioning Others
RP 39 7 18 34 3
NCR 82 2 0 7 9
Balance Luzon 27 4 14 54 0
Visayas 50 8 26 12 3
Mindanao 23 17 27 31 2
Urban 56 5 8 28 3
Rural 14 10 32 42 1
Bottom 30% 25 13 31 29 2
Middle 30% 35 7 15 41 3
Top 40% 53 4 9 32 3
14. Regional differences are significant (see Table 1 above). NCR has the highest
proportion of households (82%) served by level III systems as their main source.
However, about 7% of the NCR households rely on self-provisioning and another 9% on
vended water (others) as the main source. Self-provisioning is costly (especially in
NCR), often undertaken by the non-poor to assure themselves a reliable supply of quality
water, while the poor usually are forced to resort to vended water (which is also costly) in
the absence of access to alternative sources. Visayas has the next highest coverage of
level III systems (at 50%) as their main source of water. It also has the highest coverage
(85%) in all three formal (levels III, II and I) systems. This may be partly due to
successful advocacy by the leaders from Visayas.13
15. Mindanao has the lowest coverage under level III systems (23%) and the highest
coverage under level I systems (27%) as main source (see Table 1 above). Also, about a
third of the households in Mindanao rely on self-provisioning or vended water (others) as
their main source. This is cause for concern due to the high poverty incidence in
Mindanao, which probably results in a large number of poor people having to fend for
themselves to access drinking water. Balance Luzon has more than half the households
(54%) relying on self-provisioning as their main source, with only 27% served by level
III systems as main source. This probably reflects the large group of affluent consumers
in the region who resort to self-provisioning, which in some cases (as in Cavite province)
has led to severe depletion of ground water resources.
16. The aggregate numbers for the Philippines confirm that in terms of improving
coverage, governiment policies of the past three decades have only partially achieved the
intended results in terms of coverage of the poor (69% coverage). Analysis of self-
provisioning data indicates that the proportion of low-income populations that continues
to receive no benefits from public investments is significant (31%). Among expenditure
12 The Report Card classification according to service levels is as follows: Level III consists of private
water providers, Water Districts, LGU-managed piped systems and subdivision-rnanaged piped systems;
Level II consists of public and private comnmunal systerns; Level I consists of public point sources
(well/spring); Self-provisioning consist of private wells (shallow/dug/deep wells) and rain water collectors;
and Others consists of tankered/vended water.
13 In general, because water and sanitation services are decentralized in the Philippines, all regions lobby
for services, giving a lot of discretionary powers to fairly corrupt national agencies to decide who should
receive what level of services.
Filipino Report Card on Pro-Poor Services 54
Chapter IV: Water Supply
groups, the data indicates a wide disparity between the rich and poor in terms of access to
the highest service level (level III service). Access of the poor to level III services is less
than one-half of that of the rich. By contrast, the poor are likely to access level I and II
systems over three times more often than the rich.
17. The relatively high percentage of households resorting to self-provisioning in the
Philippines overall (37%),14 and their distribution across all expenditure groups,'5 could
be explained by two factors (see Table I above). First, inadequate water or unavailable
supply service from government and private providers could be forcing users to resort to
self-provisioning. For example, even in NCR where two private concessionaires'6 are
providing services, about 9% of households still resort to purchasing from water vendors.
A majority of these households are likely to be poor. In many of the far-flung islands of
the Philippine archipelago, accessibility or even availability of water supply services is
very low. Second, many of the better-off households, in both urban and rural areas,
resort to self-provisioning as a means of providing for themselves a higher level of
service than what level III connections currently offer. In addition to households,
commercial/industrial establishments invest substantial resources in deep tubewells,
electric pumps and overhead storage tanks.
Access to Level III Providers
18. As indicated in Table 1, only 25% of the poor have access to level III systems as
their main source of water; how many of these households are receiving services
managed by the private sector, Water Districts and LGUs? The Report Card results
indicate that almost half of the level III systems (48%) are managed by LGUs (see Table
2 below).'7 The data also shows that the likelihood of poor households securing access
to LGU-managed systems as their main water source (74%) is between five to seven
times compared to utilities managed by Water Districts (14%) and private providers
(11%). Overall, the results indicate that poor households currently accessing Level III
services are mostly served by LGU-managed systems, while the better-off are served
mostly by either LGU-managed or private systems.
14 Includes both self-provisioning and other columns in Table 1.
15 The "self-provided" population span the entire range of the expenditure distribution covering 35% of the
rich households; 44% of the middle-income households; and 31% of the poor.
16 Manila Water Company, Inc. (MWCI) and Maynilad Water Services, Inc. (MWSI).
17 There are only about 300 operational Water Districts and a handful of privately-managed level III
systems in more than 1,500 municipalities and cities in the country.
Filipino Report Card on Pro-Poor Services 55
Chapter IV: Water Supply
Table 2: Distribution of Households with Level III Systems as Main Source of Water
(Percentage distribution)
Area/Group Water Districts LGU Private Subdivision
RP 20 48 31 1
Urban 21 42 36
Rural 9 86 3 2
Bottom 30% 14 74 11
Middle 30% 26 51 22
Top 40% 18 37 43 1
19. The survey results also indicate, as shown in Table 2 above, that LGU-managed
systems predominate as the main source of level III water supply for households in rural
areas (86%). This probably reflects the initiatives taken by the concerned local
governments to extend or upgrade services to their communities, or in most cases,
convert existing level II systems, provided earlier as grants by the central government, to
level III systems without necessarily upgrading the design to accommodate the
requirements of a level III service.18 As these communities were considered
commercially "non-viable" for establishing water districts by LWUA, the initiative for
investing in a level I, II or III system rested entirely with the LGUs.19 However, as tariff-
setting in these systems is in the hands of locally elected officials, pricing decisions are
taken on the basis of political expediency, rather than on economic principles. In many
cases tariffs are either not collected at all, or are token contributions by the beneficiaries.
Data from the Report Card confirm lower expenditures by households purchasing water
from a LGU-managed system, compared to Water Districts and private systems: the
average (mean) monthly payments of a poor household are PhP 138 in a Water District,
PhPl 17 in a private system, and PhP106 in a LGU-managed system. Consequently,
many LGU-managed systems permit any household with access to the system to remain
connected at all times.
4. REASONS FOR NOT APPLYING
20. In terms of actual service coverage, as Table 1 indicates, less than two-in-five of
the households had access to level III systems (39%) nationwide. A majority of those
households without access to level III service have expressed interest in getting the
service (64%), but significantly, in both rural and urban areas, have not bothered to apply
for a connection (94%).
21. In terms of expenditure groups, the data confirms that the poor tend to be
excluded from piped water service coverage. In Table 3 below, the poor have the highest
18 This is a common practice, especially among low-income class municipalities, which results in very
poor service - 30-40 rminutes a day of water service, low water pressure, etc.
19 The ability of a LGU to establish a level III system, as opposed to a level I or level II system, depends on
the resource envelope available to the LGU from the national govemrnent under the Internal Revenue
Allotment, Congressional Development Fund available through the members of Congress representing the
area, and local resource mobilization efforts.
Filipino Report Card on Pro-Poor Services 56
Chapter IV: Water Supply
proportion of population without access to level III service (75%). Although a majority
of the poor indicated an interest in getting connected, they have mostly not applied.
22. The situation is somewhat better for middle-income and rich households.
Compared to poor households, the non-poor have a smaller proportion that does not have
access to a level III system (65% and 47% respectively). However, the proportion of
households without level IIl service who are interested in getting the service, but did not
apply, exceeds 90% for all expenditure groups (see Table 3 below).
Table 3: Distribution of Households Without Level III Water Service
(In percentage)
Not
Interested in Applied Did Not
Percentage of Total Interested in Getting for Apply for
Poverty Group Households in Category Getting Service Service Service20 Service
Bottom 30% 75 70 30 3 97
Middle 30% 65 63 37 5 95
Top 40% 47 60 40 9 91
23. Their main reasons for not applying for a piped (level III) service are: (i) there is
no level III service available in the area (60%); (ii) cost of water under level III service
may be more expensive than what it currently costs the applicant (57%); and, (iii)
households do not know how to apply (38%). While it may be difficult to remedy
constraints (i) and (ii) in the short or medium-term, the information gap could be
addressed immediately with modest effort.2'
24. In summary, the Report Card results confirm that while past policies of
predetermining levels of service for consumers increased access of the poor to some form
of water supply service, they did not lead to universal coverage in rural and urban areas,
and more importantly did not reflect consumer preferences adequately.22 Instead, among
the rich and poor alike, water supply services available from formal systems have been
inadequate to meet their needs. Although there is widespread interest in getting level III
service, the vast majority of households in all expenditure groups have not bothered to
apply because provision/expansion of services did not keep pace with consumer demand.
As the supply-demand gap has not been bridged, the consumers are forced to devise their
own strategies of providing for themselves the water services they need.
20 Six percent of those who are interested in getting level III service, actually applied for it. The main
reasons cited by these respondents for not getting level III service are as follows: (i) households have
applied but are still waiting for a response because water utilities (service providers) have been unable to
keep pace with demand (45%); (ii) existing houses are not built to allow piped connections (33%); (iii)
money has been dernanded either to "fix" paperwork or to facilitate processing (21%), and (iv) households
are unable to submnit documentation required by water utilities (21%).
21 The Report Card results show that the main sources of information on water service are television, radio
and friends and relatives. Perhaps targeted information campaigns using TV and radio could be fruitfully
utilized to bridge the information gap on how to access level III services, where appropriate.
22 The Dublin Declaration of 1994 advocates a move to providing services on the basis of what consumers
want and are willing to pay.
Filipino Report Card on Pro-Poor Services 57
Chapter IV: Water Supply
5. WATER CONSUMPTION
25. A household's consumption of water is often a useful indicator for assessing the
overall quality of service. Water-related illnesses in poor households usually arise
because the quantity of water consumed is very low (15 to 30 liters per capita per day),
and the water has been stored in unclean containers. Piped water supply allows a family
access to more water and, more importantly, reduces the risks of contamination through
storage for long periods of time. One could assume a priori that a household with a level
III connection consumes more water than another household whose access is only to a
level II or level I system.23
26. At the national level, the Report Card results confirrn that households connected
to a level III service have the highest average monthly consumption of water across
service levels (see Table 4 below). The mean and median values of levels II and I
systems are one-half or less of level III systems, suggesting a much lower capacity of the
former (levels II and I systems) to meet household requirements, as compared to the latter
(level III systems). If consumption levels are used as a proxy for service quality, then
level III systems are the preferred choice of consumers. Even the poor consume more
water from level III systems, compared to any other water source.
Table 4: Average Household Consumption of Water from Main Source
(In cubic meters per month)
Area/Grou Level III Level II Levet I Self-provisioning Others Total Average
RP
Mean 22.82 8.21 8.38 10.38 7.76 14.64
Median 12.59 6.24 6.24 7.28 6.24 8.32
Urban
Mean 20.45 8.97 8.83 10.41 8.03 15.73
Median 13.00 6.24 6.24 7.90 6.66 10.41
Rural
Mean 37.18 7.63 8.22 10.36 8.82 13.02
Median 12.49 6.24 6.24 6.45 6.24 6.24
Bottom 30%
Mean 13.25 6.87 7.23 8.53 7.12 9.07
Median 10.00 6.24 6.24 6.24 3.12 6.24
27. However, the significant variation between the mean and median average monthly
consumption figures within each level (especially within level III systems) indicates that
there are differences in quality among the types of management of the systems within
each level (see Table 4 above). The lower value of the median (12.6 cubic meters)
compared to that of the mean (22.8 cubic meters24) for aggregate level III systems
23 If consumption is actually less from level III systems, compared to level I and II systems, the explanation
could be because of one of two factors. First, the price of water is relatively high, and households are
forced to economize water usage. Second, the level III service is either so unreliable or so inadequate that
consumers have to resort to other sources/service options to meet their needs.
24 This translates to an average consumption of 114 liters per capita per day, assuming a household size of 5
members. It is significantly lower than the average consumption for the 50 largest water utilities in Asia,
which is 157 liters per capita per day. See Second Water Utilities Data Book, edited by Arthur C. McIntosh
and Cesar E. Yniquez, Asian Development Bank.
Filipino Report Card on Pro-Poor Services 58
Chapter IV: Water Supply
suggests that more households experience relatively low quality service than good quality
service. The reasons could include (i) the limited number of hours per day of water
availability (reported by the survey to be an average of 8.5 hours a day); (ii) low water
pressure; and, (iii) poor water quality.
28. Average (mean and median) consumption of rural households is consistently
25
below that of urban households, except under level III systems (see Table 4 above).
The average (median) water consumption of rural households26 is only 30 liters per capita
per day. In other words, half the rural households are consuming only 30 liters or less per
capita per day, which is unacceptably low.
29. The data on poor households reveals that the median per capita daily water
consumption of the poor is barely 30 liters, and similar to that of rural households (see
Table 4 above). For the poor buying from vendors (others), the median consumption
drops to only 15 liters per capita per day, a figure that is dangerously close to meeting
bare survival needs. The data reinforce the argument that inequitable access to water
supply affects poor families disproportionately, and consequently increases their
vulnerability to water-induced illnesses.
Consumption in Level III Systems
30. At the national level, households under privately-managed systems have a higher
average consumption per month, followed closely by level III systems under LGU
management (see Table 5 below). This may suggest that private providers, in general,
offer better services than LGU-managed systems and Water Districts. Possibly, a more
appropriate explanation is that the two private concessionaires in Metro Manila (NCR)
are charging tariffs substantially below Water District averages, and therefore, could have
encouraged higher consumption.27 A second factor appears to be the availability of level
III service in a particular region. This feature is evident in the Visayas and Mindanao,
where LGU-managed level III systems predominate, but with significantly higher water
consumption levels due to the low tariffs charged.28
25 The number of rural households served by level III systems is small, since only 14% of rural households
have access to level III systems, mostly LGU-managed systems.
26 Assuming a household size of five persons and averaged across all systems.
27 The results show that households paid on average about PhP 15.20 per cubic meter of water to Water
Districts, around PhP9.60 to privately managed systems, and approximnately PhP5.95 to LGU-managed
systems.
28 In Balance Luzon though, while LGU-managed systems are predominant, households under Water
Districts have higher household consumption levels than LGU-managed systems. The explanation could
be that although the Water Districts are fewer, they offer much better service in terms of quality and
affordability.
Filipino Report Card on Pro-Poor Services 59
Chapter IV: Water Supply
Table 5: Average Household Consumption of Water from Main Source Served
by Level III Systems
(In cubic meters per month)
Region Water District LGU Private Subdivision
RP
Mean 16.45 22.75 27.01 17.69
Median 12.75 12.49 18.00 18.73
NCR
Mean 27.61
Median 19.00
Balance Luzon
Mean 25.65 15.42 4.48
Median 18.73 12.00 4.48
Visayas
Mean 15.67 20.30 6.24 31.22
Median 12.25 12.49 6.24 31.22
Mindanao
Mean 11.78 43.59 28.08
Median 12.00 12.49 28.08
Note: Only a few (in some cases only one) sample households served by private and subdivision
systems in Balance Luzon, Visayas and Mindanao.
31. In general, the results suggest that (largely on account of Metro Manila or NCR)
private systems provide households with higher consumption levels in urban areas, while
LGU-managed systems provide higher consumption levels in rural areas (see Table 6
below). Household consumption levels do not appear sensitive to the expenditure
categories, but rather to access to level III systems. Further, on comparing consumption
in Water Districts (which charge tariffs on the basis of full cost recovery) and LGU-
managed systems (in which tariffs are either very low or non-existent), the survey data
indicates that consumption of water supply by poor households is sensitive to the tariff
regime.
Table 6: Average Household Consumption of Water from Main Source Served
by Level III Systems
(In cubic meters per month)
Area/Group Water District LGU Private Subdivision
Urban
Mean 16.28 16.92 27.14 10.93
Median 13.00 11.93 18.00 10.93
Rural
Mean 18.81 39.93 17.16 31.22
Median 7.92 12.49 17.16 31.22
Poor (bottom 30%)
Mean 8.37 13.56 17.48 -
Median 6.00 10.00 13.64
Note: Only a few (in some cases only one) sample households in rural areas are served by private
and subdivision systems.
32. In summary, if consumption levels are used as a proxy for service quality, level
III systems are the preferred choice of the clients. The evidence indicates that most of the
poor, if given the choice, would access level III service, and consume water to the point
that they could afford.
Filipino Report Card on Pro-Poor Services 60
Chapter IV: Water Supply
6. HOUSEHOLD EXPENDITURE ON WATER
33. The previous section noted that water consumption by the poor is unacceptably
low. This reinforces the earlier conclusion that past government sectoral policies of
directing water supply investments according to population density have not led to the
desired outcomes of either extending universal coverage or providing the covered poor
with adequate services. This section investigates household expenditure patterns, with a
view to understand whether (i) consumption has been affected by cost recovery policies,
and (ii) paying for water supply has imposed a financial burden on the poor.
34. The average monthly expenditure on water per household includes the sum of the
amounts paid to the main source, plus the cost of water treatment, plus outlays on bottled
water purchased (see Table 7 below). The Report Card results show that on the
aggregate, vended water (other) and self-provisioning registered the highest average
monthly expenditure on water, with the amount paid to main source accounting for the
biggest expense item. For households served by the three service level categories (levels
III, II or I), the biggest expense item is the cost of bottled water, on which household
outlays exceed the amount paid to the main water source (provider/utility).
Table 7: Average Monthly Expenditure on Water by Service Level
(Mean Monthly Expenditure per Household - in PhP)
Area/Group Level III Level II Level I Self-provisioning Others
RP
a) Paid to Main Source 199 74 110 416 445
b) Spent on Water Treatment 90 105 35 102 111
c) Spent on Bottled Water 222 146 135 83 228
Total 511 324 280 601 784
Urban
a) Paid to Main Source 213 107 175 497 482
b) Spent on Water Treatment 84 33 62 153 111
c) Spent on Bottled Water 244 219 197 86 245
Total 541 359 434 736 838
Rural
a) Paid to Main Source 103 51 66 173 15
b) Spent on Water Treatment 268 213 25 34 -
c) Spent on Bottled Water 61 18 90 74 80
Total 433 281 181 281 95
Bottom 30%
a) Paid to Main Source 112 47 35 60 164
b) Spent on Water Treatment 47 24 22 54 158
c) Spent on Bottled Water 37 20 44 32 20
Total 197 91 102 146 342
Top 40%
a) Paid to Main Source 233 264 125 563 632
b) Spent on Water Treatment 108 400 48 139 88
c) Spent on Bottled Water 298 338 133 115 306
Total 639 1002 306 818 1026
35. There are variations between urban and rural areas, and between poor and rich
households (see Table 7 above). Rural communities incur fairly substantial expenditures
in level III and level II systems, compared to their urban counterparts, because treatment
Filipino Report Card on Pro-Poor Services 61
Chapter IV: Water Supply
costs are high. This implies that the quality of water supply in rural areas is considerably
worse than in urban centers. When the disaggregation is by expenditure groups, the poor
appear to be compromising in terms of low expenditure on water treatment. While they
may appear to save a little in terms of water treatment costs, they may lose a lot in terms
of health. As the health sector chapter notes, the poor are more likely to suffer from ill
health compared to the non-poor. Thus, the poor, either due to ignorance, lack of
resources or absence of health communication and education, appear to be trading-off
low costs of preventive measures like water treatment for high curative costs required to
deal with ill health. This has serious implications for small children, for example, who
get exposed to risks of chronic diarrhea. Inadequate sanitation further compounds the
problem.
36. The above findings confirm that Filipino households, in general, do not consider
that water provided by any of the water supply systems is suitable for drinking without
treatment. This is a common phenomenon in many of the ASEAN countries (e.g.,
Indonesia, Thailand, Vietnam and Cambodia), and reflects the fact that water service
providers still have a long way to go in terms of management and organization before the
WHO standards on water quality are met. While this should be valid for rural and urban
areas equally, it is interesting to note that (i) households in rural areas spend the largest
amount in treating water supply from level III systems29 (on average, more than twice the
amount paid to the main source); and; (ii) bottled water consumption is significantly
lower in rural areas compared to urban areas. A probable explanation for (i) is that LGU-
managed systems in rural areas are poorly run, with leaks in the transmission/distribution
network requiring households to spend resources for treatment (usually boiling the
water). As far as bottled water is concerned, the purchasing power of consumers in rural
areas, and the availability of bottled water,30 is probably a lot less than in urban areas.
37. For the poor, the data indicate that self-provisioning requires higher monthly
expenditure outlays as compared to level II and level I systems (see Table 7 above). It is
also interesting to note that the poor spend more on level III than on self-provisioning,
and spend the most on vended water. Accessing water from a neighbor's house (a level
II system) costs the lowest because it is common that this service is often provided for
free, particularly when the household in need is poor.
38. In general, the share of outlays on water in total household expenditure varies
between 2% and 9% (see Table 8 below). Self-provisioning and vended water (others)
show the highest shares for most categories. On average, poor households spend an equal
or higher share of their household expenditure (on smaller quantities of poorer quality
water consumed), compared to rich households under all systems, except level H.31 Poor
households relying on vended water (others) as their main source devote 9% of their
household expenditure to purchase water, which is the highest share among all categories
and sources. This group should receive the first priority in new service provision.
29 86% of the rural household with access level III systems, do so from LGU-managed sources.
30 Many rural households may not have access to "cheap" bottled water, often sold in large containers or in
bulk at refilling stations in urban areas such as Metro Manila.
3' The exception may be due to the low price paid, or free water, from a neighbor's house.
Filipino Report Card on Pro-Poor Services 62
Chapter IV: Water Supply
Table 8: Share of Expenditure on Water in Total Household Expenditure by Service Level
Area/Group Level III Level II Level I Self-provisioning Others
RP 3% 4% 4% 6% 6%
Urban 3% 4% 4% 6% 6%
Rural 4% 5% 3% 3% 2%
Bottom 30% 5% 3% 3% 4% 9%
Top 40% 3% 6% 2% 4% 5%
7. SATISFACTION WITH WATER SUPPLY SERVICES
39. This section summarizes the Report Card findings on household satisfaction with
water services. The ratings on satisfaction include aspects such as ease of getting
connected to a system or ease of use of a public faucet/well, reasonableness of price
charged, ease of payment, quality of repair service, quality of water supplied (smell, taste,
purity, pressure, danger of drinking without treatment, etc.), dependability of supply, and
behavior of providers towards customers.
40. On the aggregate, self-provisioning received the highest overall satisfaction rating
as the main water source, and vended water the lowest (see Table 9 below). The overall
satisfaction ratings are lowest for all systems/sources in NCR, as compared to other
regions. For the poor, self-provisioning registered the highest overall satisfaction rating
at 1.63 with other service levels (levels I, II and III) registering almost similar ratings
(between 1.50 and 1.54). For the rich, while self-provisioning had the highest rating,
other service levels were rated significantly lower in terms of satisfaction. This could be
explained, in part, by the higher expectations on quality and reliability of water service by
the rich as compared to the poor.32 The poor and the rich alike expressed lowest
satisfaction with vended water (0.86 and -0.07, respectively).
Table 9: Net Satisfaction with Main Source by Service Level
Region/Area/Group Level III Level II Level I Self-provisioning Others
RP 1.38 1.43 1.45 1.58 0.61
NCR 1.08 1.00 - 1.23 0.06
Balance Luzon 1.59 1.56 1.49 1.57 1.50
Visayas 1.35 1.53 1.55 1.70 0.88
Mindanao 1.65 1.42 1.33 1.64 1.60
Urban 1.34 1.29 1.44 1.56 0.33
Rural 1.65 1.54 1.45 1.60 1.57
Bottom 30% 1.50 1.54 1.55 1.63 0.86
Middle 30% 1.49 1.44 1.50 1.52 1.56
Top 40% 1.29 1.12 1.14 1.61 -0.07
Very Satisfied - plus 2; Somewhat Satisfied - plus 1; Undecided whether satisfied or not - 0;
Somewhat Dissatisfied - minus 1; Very Dissatisfied - mninus 2
32 This implies that the rich have higher expectations on quality and reliability of service than the poor even
though the price paid by both is the same to the same utility. For example, the rich have more water-based
facilities in their homes, and therefore may get more frustrated when the water pressure is inadequate or the
toilet doesn't flush
Filipino Report Card on Pro-Poor Services 63
Chapter IV: Water Supply
8. KEY FINDINGS AND RECOMMENDATIONS
41. The key findings emerging from the preceding discussion are summarized in the
following with some recommendations on potential avenues to address the problems:
* Government policies of extending water supply services on the basis of a three-level
classification and cost recovery strategies have resulted in many of the poor accessing
level I and level II services of unsatisfactory quality and quantity in both urban and
rural areas. Level III systems often received the largest State subsidies (in capital and
operational costs), which serve mainly the non-poor. Thus, the inequality in low
access of the poor to level III services is compounded by the high subsidy going to
the systems and the majority non-poor clients they serve. While the sector strategy
emphasizes full cost recovery for new systems, it is equally important to initiate
measures to remedy the inequities in existing systems, especially in those offering
level III services.
* Where the poor have access to level lII systems, their water consumption has been
significantly higher than when they access level I and level II services. This
highlights the equal importance attached to convenience and service reliability by the
poor as by the non-poor, highlighting the importance of developing targeted programs
aimed at increasing coverage of level III systems in all communities. In the LGU
Urban Water and Sanitation Program (LGUUWSP) assisted by the World Bank,
house connections are being financed by the loan, so that all households receive an
equitable access to the service.
* The demand for water by poor households across the different types of management
of level III service is sensitive to the tariffs charged. The highest consumption of
water was recorded in LGU-managed water utilities, in which tariffs are low and
services of erratic reliability and quality. Experience obtained through LGUUWSP
and the AusAid-financed Community Water and Sanitation Program in the Visayas
highlight the significance of engaging communities in a consultative process to
determine the services they want and are willing to pay for. These best practice
approaches should be adopted in the existing systems to improve their performance.
• Households in Mindanao are under-served in safe water supply, as in other basic
services.33 Special attention to improve coverage of safe water service in Mindanao
is necessary.
* Rural water supply strategy needs to be re-evaluated, so that a demand-focus is
introduced. As discussed earlier in the report many low-income rural communities
were "assigned" level I and level II systems as a result of the "top down" planning
criteria adopted earlier. These policies undoubtedly increased nominal coverage of
water supply, but failed to meet the preferences and willingness to pay of
33 Mindanao has the lowest coverage under level III systems (23%) and highest coverage under level I
systems (27%) as main source. Also, about a third of the households in Mindanao rely on self-provisioning
or vended water (others) as their main source.
34 The situation in rural Visayas is not much better than in Mindanao.
Filipino Report Card on Pro-Poor Services 64
Chapter IV: Water Supply
consumers.35 The Report Card results show that average (median) household
consumption of water is only about 30 liters per capita per day under all levels of
service, except level 111.36 In addition, rural communities incur substantial
expenditures on water treatment, as the quality of their water supply is considerably
worse than urban areas. Increased focus on rural water supply both at the policy and
program/project levels is called for.
* Although the Philippines is considered to be well endowed in water resources, water
consumption is low especially in rural areas and among the poor. Filipino women, as
stewards of the household, are most adversely affected by inadequate access to water.
For example, the burden on women of such chores as finding and fetching water,
laundering, treatment (mostly boiling) of water for drinking, and bathing of children
would increase considerably, leaving little time for other productive activities. It
impedes the advancement of women both as economic and social agents. Therefore,
it is important to consider the gender dimensions of access to safe water in policy and
investment programs in addition to other aspects.
* The Report Card results show that the poor are devoting a considerably larger share
of their total household expenditure to water, with those dependent on vended water
spending as much as 9%. Unsurprisingly, the poor accessing vended water give this
water source their lowest satisfaction rating. Enhancing access of the poor to service
under level III systems should receive priority, especially of those whose main source
is vended water. Wherever house connections are not feasible (e.g., illegal and/or
temporary squatter settlements), the level III systems should be encouraged to
develop with the communities solutions that are technically feasible and financially
sustainable. In this context, the use of direct connection subsidies for poor
households is an attractive option worth exploring.
* Self-provisioning is a significant option for all expenditure groups and across urban
and rural areas. On the one hand, self-provisioning could provide a good level of
service for the rich if adequate investments are made in the water infrastructure in
terms of developing the water source for sustainable use, pumping, storage and
distribution. On the other hand, self-provisioning could be a wretched last resort for a
poor household forced to collecting water from a pond or river, storing in a tin or
plastic can, and utilizing this without any treatment. From a welfare point of view the
outcomes for the rich and poor are diametrically opposite. Low-income households
dependent on self-provisioning as the main source for their water should be given
preferential treatment for coverage in future water supply schemes.
* Lower payments by households to LGU-managed water utilities (mostly in rural
areas) are offset by substantially higher expenditures on water treatment. These
opportunity costs are perhaps not fully understood by the concerned consumers, and
35 The Asian Development Bank and World Bank have been supporting projects on rural water supply.
However, the main focus was on level III water supply systems in urban areas and extending/improving
service in Water Districts and poblacion areas of LGUs, respectively.
36 Only about 14% of rural households have access to level III systems as their main water source (see
Table 1). The proportion of rural households covered by level III systems as main source is the lowest
among all regions, areas and expenditure groups. It is barely a third of the national average.
Filipino Report Card on Pro-Poor Services 65
Chapter IV: Water Supply
even after treatment the exposure to health risks remain serious. Getting bad quality
water from a level III system is perhaps a worse option than not receiving water at all.
Despite the government investing more than $100 per household in these systems,
respondents report spending substantial amounts on treating the water. LGU-
managed systems are the most scandalous in tenns of physical and financial leakages,
although this is an indictment of all the level III systems in the Philippines.37
* For households served by the three service level categories (levels III, II or I), the
biggest expense item is the cost of bottled water, on which household expenditures
exceed the amount paid to the main water source. While bottled water is supposed to
be regulated by the Bureau of Food and Drugs,38 there are more gaps than regulation
in this area. This is due to lack of adequate number of qualified heath regulation
officers, lack of laboratory facilities for testing, weak health regulatory systems and
procedures, and gaps in specific legal mandates.39 Health regulation in general, and
in this case relating to bottled water, needs to be strengthened to safeguard consumers
against health hazards. Not only do Filipinos have to live with unsafe water from
water utilities, they also have no assurance that the expensive bottled water they
consume is of better quality.
* While a majority of the poor would like to access level III services, very few bother
to apply for a house connection because of unavailability of the service, particularly
in rural areas. This could be a direct consequence of past government policy of pre-
determining community eligibility in terms of the three levels of services. Current
efforts of the government through IBRD-financed LGUUWSP are aimed at changing
the strategy to one that is demand-driven.4°
3 The non-revenue water ratios in MWSS and Philippine Water Districts continue to be among the highest
in ASEAN countries.
38 See Administrative Order No 39, 1996, Department of Health.
39 See Health Sector Reform Agenda, Department of Health, Philippines.
40 The three principal tenets of the new approach, being operationalized through LGUllWSP are:
Principle I: Technically Feasible Options and User Choice
The sustainable management of water supply and sanitation services requires that constructed systems
provide potential consumers (poor and non-poor alike) the opportunity to make an informed choice among
technically feasible options for the delivery of services. The key element in the procedure to select service
options is the value, which users attach to the improvement in service offered by the technical option. For
example, in Indonesia, it is required that potential users be given an opportunity to evaluate the service
option against the cost of the existing arrangement (e.g. service from water vendors, extraction of ground
water, etc.).
Selection of the preferred option in the current decentralized environment also requires the involvement of
municipal/district administrations, so that information about the projected costs and expected user
payments required for the service improvement is shared and understood by all stakeholders. The result of
this process will be an investment program promoting full cost recovery, with users (households) and
service providers from the barangay and municipal council levels exercising choice, and paying in full for
the services.
Principle II: Lowest Appropriate Management Level
In determining the lowest appropriate level for the management of water supply systems, the design of a
water supply system must take into account the fact that the cost of a technical option is strongly influenced
by the management mode and the scope of the service area. Economies of scale often result in lower costs
for services provided to larger populations (both poor and non-poor) and service areas. In practice,
therefore, it is useful to investigate in which cases the establishment of a regional service delivery
Filipino Report Card on Pro-PooT Services 66
Chapter IV: Water Supply
The Report Card results indicate that median consumption of water by the poor is
barely 30 liters per capita per day, and as low 15 liters per capita per day (for vended
water), highlighting the substantial risks faced by them to water-induced illnesses.
Access to well-performing level III systems is an obvious answer. However, there
could be many situations in which households and even entire communities are too
poor to finance a level III system. In these situations the national government needs
to develop a strategy of targeting the poor effectively. The LGUUWSP is attempting
to test out some options in this regard, but the Report Card results suggest that more
work is needed in this area.
* Water supply quality and reliability vary considerably from one service provider to
another, but all respondents recognize the need to treat water before usage across all
types of services. Among expenditure groups, the poor spend the least on treatment,
thus exposing families, especially small children, to risks of diseases caused by
contaminated water. The best solution may be to increase their access to a larger
quantity of water at affordable prices. Improving the access of the poor to services
under level III systems is a solution to this problem.
* Consumer dissatisfaction is lowest in the case of self-provisioning because affluent
households invest resources in ensuring quality and reliability of their water supply.
However, the actions by the rich have led to several cases of adverse enviromnental
impacts because of excessive aquifer draw downs (as in Cavite, Metro Cebu and parts
of Metro Manila). Promoting sustainable utilization of water resources through
conjunctive use of surface and ground water should be promoted. The regulatory
initiatives should go beyond prohibition of further ground water exploitation and
promote conjunctive use options.
42. In conclusion, the Report Card results confirm some of the beliefs among the
government, informed professionals and donors. They throw light on other issues that
need attention. The results call for national policies that provide water supply services on
the basis of what clients want and are willing to pay for on the one hand and targeted
organization would result in lower costs and lower requirements for user payments for the same service
level, compared to single community or Level III managed system.
Principle III: Identifying Feasible Financing Levels and Repayment Optionsfor LGUs
Any investments in water supply and sanitation taken at the municipal level are likely to result in costs that
are large relative to the initial revenue base of the municipality, even after the fiscal transfers through the
Internal Revenue Allotments (IRAs) are factored in. At the same time, the expected benefits from the
improvement for current and future users will be long lasting, if managed effectively. Financing the
improvements from up-front revenues will not generally be possible for municipal governments, which
have little experience in financial management much beyond the range of current budgets. Assistance to
overcome this deficiency is being provided through two forms of interventions by the national government.
First, LGUs are being provided technical assistance by Government Financing Institutions (GFIs) such as
the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP) to develop
"bankable" projects that rely on the cash flow from customer payments (for services provided) for
amortization of debt. In the above context, a long-range financial management model to estimate LGU
borrowing capacity to finance improvements safely has been developed, and the national government has
encouraged commercial banks to substitute for national sectoral agencies as the conduits for channeling
funds to municipal governments interested in water supply and sanitation investments. Second, a
government policy framework for providing additional financing for investments targeting the poor and
environmentally blighted areas needs to be developed.
Filipino Report Card on Pro-Poor Services 67
Chapter IV: Water Supply
interventions to provide services to those that do not have the capacity to pay (e.g., some
poor groups) and/or to correct for market failures (e.g., in rural areas). The proposed
Water Summit to be organized by NEDA in 2001 could be utilized to engage the various
stakeholders41 in a dialogue on the options (including targeting options) available, and
those that would suit the Philippine situation the best.
4' For example, national government, LGUs, private and public service providers, civil society and
development partners.
Filipino Report Card on Pro-Poor Services 68
Chapter IV: Water Supply
ENDNOTE ON WATER SECTOR INSTITUTIONS
1. It is important to note that unlike in health and education sectors covered in this
Report Card, there is no "national" Department for water supply and sanitation as water
supply is considered to be a local service and government policies have consistently
encouraged decentralization of decision-making to the lowest appropriate level. To date,
the roles of national agencies have been limited to financing (e.g., by the Local Water
Utilities Authority or LWUA and other government financial institutions or GFIs),
provision of technical assistance in construction whenever requested by local government
units (e.g., by the Department of Public Works and Highways or DPWH), and capacity-
building of local government units (LGUs) in planning, implementation and operation
and maintenance (O&M) of community-based water supply systems (by the Department
of Interior and Local Government or DILG). Operation and maintenance responsibilities
have been with autonomous Water Districts, municipal departments of LGU
administrations, and community groups at the barangay level (such as Barangay
Waterworks and Sanitation Associations or BWSAs).
2. The responsibilities for development of the water supply sector are dispersed
among several agencies, both national and local. With the implementation of the Local
Government Code of 1991, the local government units (LGUs) have begun to play an
increased role in the water supply sector. The functions and responsibilities of the main
agencies involved in the Water Supply sector are described briefly in the following:
(a) Department of Public Works and Highways (DPWH): This
Government line agency is responsible for setting and updating technical
standards for engineering surveys, design, construction and operation and
maintenance of level I systems, and in assisting the LGUs upon
request/agreement, in the conduct of engineering surveys, preparation of
plans, specifications, programs of work and construction management
through its District Offices.
(b) Metropolitan Waterworks and Sanitation Service (MWSS): MWSS is
a public corporation created in 1971 and is responsible for providing water
supply services to the eight cities and nine municipalities comprising
Metro Manila and the adjacent urbanized areas in the provinces of Rizal
and Cavite. In 1997, the agency has contracted out the delivery of
services under concession agreements with two private operators, Manila
Water Company, Inc. (MWCI) and Maynilad Water Services, Inc.
(MWSD.42
(c) Local Water Utilities Administration (LWUA): The agency is a
specialized lending institution for the promotion, development, and
financing of local water utilities or Water Districts in provincial urban
42 Two other water systems, the Subic Bay Water & Sewerage and Clark Water Sewerage, are being
managed by private companies as joint ventures with local governments. The analysis and discussion in
this chapter is confined to the privately managed systems in Metro Manila (NCR).
Filipino Report Card on Pro-Poor Services 69
Chapter IV: Water Supply
centers. LWUA was created in 1973 under the Provincial Water Utilities
Act. Executive Order No. 124 issued in 1987 delegated to LWUA the
responsibility for water supply in all urban areas outside the jurisdiction of
MWSS. The agency is also mandated to provide engineering,
management, and institutional assistance to duly formed Water Districts
throughout the country.
(d) Water Districts (WDs): WDs are non-profit, quasi-public, independently
administered local water utilities created on local initiative for the purpose
of developing and operating water supply systems in provincial urban
centers. They are created under Presidential Decree No. 198 (which also
created LWUA) and number about 560. The WDs develop and operate
their systems drawing on their own revenues and loans from LWUA.
(e) National Water Resources Board (NWRB): Formerly called the
National Water Resources Council, the agency was created in 1974 and
reorganized inl 987. NWRB is a multi-agency regulatory body
responsible for regulating the use of water resources in the country
through the issuance of water rights, regulation of tariffs of privately run
water systems and establishment and management of a user-friendly water
resources data management system.43
(f) Local Government Units (LGUs): Under the Local Government Code,
the LGUs (Provincial and Municipal), together with the beneficiary
communities, assume responsibility for construction and financing the
operation and maintenance of their respective water supply and sanitation
facilities.
(g) Department of Interior and Local Government (DILG): DILG
provides general adrninistration and institution building assistance to
LGUs, particularly in the establishment and development of Barangay
Waterworks and Sanitation Associations (BWSAs). In addition, DILG
43 The NWRB has not been effective in fulfilling its role due to internal difficulties (e.g., lack of skilled
personnel and resources) and external constraints (e.g., controversy surrounding its location and
overlapping functions with other agencies). Consequently a Presidential Task Force on Water Resources
Development and Management (PTFWRDM) had moved to create an independent authority with sufficient
powers and resources that will formulate national policies on water resources management, regulation
(quantity, quality, economic and service efficiency), utilization, planning and conservation. However, the
proposal encountered several problems as key players in the sector changed with the change in
administration(s) and arguments about how best to address the problemns continue.
Filipino Report Card on Pro-Poor Services 70
Chapter IV: Water Supply
provides overall direction in the implementation of all water supply and
sanitation projects at LGU level. DILG is also tasked to formulate, in
association with LGUs, provincial water supply and sanitation
development plans.
(h) Department of Health (DOH): DOH is mainly responsible for setting
and updating standards on water quality testing, treatment and surveillance
and sanitary practices, monitoring and evaluation of the health and
hygiene education programs implemented by the local health offices,
particularly in areas where waterworks systems are expected to be
constructed, and in providing technical assistance to the LGUs in the
conduct of periodic water quality control and surveillance-related
activities. In rural areas, the Rural Health Units (RHUs) are responsible
for disinfecting the wells located within their command areas.
(i) National Economic and Development Authority (NEDA): NEDA is
the general policy-making body for economic and development planning
of the country. NEDA has an Infrastructure Staff, which reviews project
proposals and recommends policy directions and guiding principles after
consultation with concerned Government agencies and groups. The
Infrastructure Staff of NEDA acts as the Secretariat to the Inter-Agency
Infrastructure Committee. The NEDA Infrastructure Committee is
responsible for formulating the water sector policies, plans, strategies and
programs. The members of the Committee include the representatives of
all sector agencies (e.g., LWUA, DILG, MWSS, DPWH, and NWRB),
other line departnents (e.g., DENR and DOHl), and oversight agencies
(e.g., Department of Finance or DOF and Department of Budget and
Management or DBM).
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER V: HOUSING'
"One of government's more important 'targeted'programs -public housing -
is highly regressive, benefiting mainly non-poor households in urban areas.
Philippines Poverty Assessment
1. POVERTY AND HOUSING
1. While health and education have gained recognition as social services, which the
Government of the Philippines is committed to provide, housing for the poor has not
enjoyed the same privileged status. Indeed, housing as an economic and social necessity
drew serious attention from the government only when hundreds of blighted shanty
colonies sprang up in Metro Manila and larger Philippine cities. Fleeing poverty or civil
strife in the countryside, rural migrants invaded vacant urban spaces to establish an abode
in the city as a base for their livelihoods and new lifestyles.
2. Compounding the continuing migration has been the sheer natural increase of the
urban population, coupled with the inability of the government and the economy in the
post-World War II years to keep pace with the growing shelter needs.3 By the late 1990s,
estimates of the housing need - that combine housing backlog and future need - were put
at 700,000 units for Metro Manila alone, and three million nationwide. This gap is not
only applicable to the poor; a private sector estimate of economic market-based housing
need for Metro Manila was 102,000 units in 1997.4 hncreased migrant flows to small and
medium-sized cities over the past decade presage similar trends unless local government
authorities act decisively to provide secure tenure and/or housing to their urban poor
' This chapter has been prepared by Mary Racelis and housing specialists from the Institute of Philippines
Culture (Anna Marie Karaos, Marichi Guevara, Ana Marie Dizon and William Farce), with inputs from the
Report Card team.
2 East Asia and Pacific Region, The World Bank, 2000.
3Ton Van Naerssen, Michael Ligthart and Flotilda Zapanta, "Managing Metropolitan Manila," in The
Dynamics of Metropolitan Management in Southeast Asia, ed. Jurgen Ruland (Singapore: Institute of
Southeast Asian Studies, 1996); Ceres Doyo, "Government Housing Strategy Flawed - David," Philippine
Daily Inquirer, November 14, 1999.
4 W. Paul Strassman and A. Blunt, "Land Prices and Housing in Manila," Urban Studies, Vol. 31, No.2,
1994 cited in Urban Research Consortium (URC), "Metro Manila Urban Poor Housing Study," a paper
commissioned by the Overseas Economic Cooperation Fund, Quezon City, 21 February 1997, Ma.
Lourdes G. Rebullida, "Changing Dynamics in Urban Poor Housing," in Housing the Urban Poor:
Policies, Approaches, Issues, ed. Ma. Lourdes G. Rebullida, Dolores Endriga and Geraldine Santos
(Quezon City: University of the Philippines Center for Integrative and Development Studies, 1999); Ceres
Doyo, "Government Housing Strategy Flawed - David." Philippine Daily Inquirer, November 14, 1999.
Filipino Report Card on Pro-Poor Services 72
Chapter V: Housing
constituents. Modest pilot efforts at addressing the housing needs of the poor by the
government have been evident over the years.5
3. So compelling has been the image of the poor-in-the-city, and in many cases, so
effective the organized efforts of urban poor groups demanding at least security of tenure,
if not actual housing,6 that government officials have virtually ignored rural housing and
focused almost solely on urban shelter needs. The govermnent's efforts have focused
over the years on: (i) relocation and resettlement, (ii) sites and services improvement,
(iii) production of housing units, and more recently, (iv) housing finance for land tenure,
site development, and house improvement.7 The civil society sector8 has taken the lead
in creative housing alternatives catering to low-income groups, notably through the
Community Mortgage Program (CMP). Under the Program, occupants on a particular
piece of land are organized to review their housing situation, negotiate the purchase of
the property they are occupying, obtain 25-year government financing, and manage
household resources to repay their loans.9
4. The relative neglect of rural housing and the apparent concentration of housing
assistance in highly urbanized areas, particularly Metro Manila, are in part the result of
highly centralized housing assistance services delivery. Housing assistance has
traditionally been regarded as the responsibility of the national government and local
governments, especially in Metro Manila, typically relied on national housing agencies
(e.g., the National Housing Authority) to initiate housing programs or address problems
related to housing. It was only with the enactment of the Local Government Code in
1991 and, more importantly, of the Urban Development and Housing Act in 1992 that
fornal recognition was given to the role of local governments in the provision of housing
services. But even with the establishment of a legal framework assigning a greater role
and responsibility to local govermnents for providing housing, the resource allocation and
institutional set-up in the housing sector have not been decentralized to enable local
governments to take a more active role.
2. STRUCTURE OF THE CHAPTER
5. The Filipino Report Card on Pro-Poor Services covers housing assistance services
as one of five key sectors. The Housing Sector Chapter is divided into three main parts.
5According to Rebullida, the Community Mortgage Program, which makes available affordable loans to
the urban poor, is the pioneering effort of the government at socialized housing. This is an imnprovement
over the earlier solution of providing loans for house and land acquisition, inasmuch as the poor, who have
low income, could not avail of them (Rebullida, "Changing Dynamrics in Urban Poor Housing").
6 Cynthia D. Nolasco, "The Urban Poor and the Philippines: A Situationer." A paper commnissioned by the
Office of Netherlands Volunteers, Quezon City, 1990.
7 Ma. Lourdes G. Rebullida and Dolores Endriga, "Govenunent Responses to the Housing Problem of the
Urban Poor," in Housing the Urban Poor: Policies, Approaches, Issues, ed. Ma. Lourdes G. Rebullida,
Dolores Endriga and Geraldine Santos (Quezon City: University of the Philippines Center for Integrative
and Development Studies, 1999).
8 Non-government organizations (NGOs), people's organizations (POs), cooperatives, and private non-
profit groups.
Rebullida, "NGO-PO Approaches to Urban Poor Housing," in Housing the Urban Poor: Policies,
Approaches, Issues, ed. Ma. Lourdes G. Rebullida, Dolores Endriga and Geraldine Santos.
Filipino Report Card on Pro-Poor Services 73
Chapter V: Housing
6. Part One (Section 4) presents an overview of the current housing situation from
the perspective of ordinary Filipinos, and its distribution across geographic and socio-
economic groups. Key issues addressed are identification of groups in need of
(improved) housing, their location, their need for security of tenure, and aspects of their
housing that need improvement.
7. Part Two (Section 5) focuses on the reach of government and non-government
(including the private sector) housing assistance services, highlighting critical factors
that presently constrain the delivery of, and access to, these services. This section
identifies the groups that are under-served as far as housing assistance is concerned and
the reasons for the exclusion of these groups.
8. Part Three (Section 6) discusses the implications of the key findings of the Report
Card survey for the major government housing programs. The discussion focuses on the
factors limiting the scope and effectiveness of housing services highlighted in the
previous sections and how these issues relate to existing government housing programs.
Finally, preliminary recommendations for improving housing assistance to the poor and
other excluded groups are outlined.
3. THE SURVEY
9. The national Report Card survey of 1,200 households was undertaken in March-
April 2000 to gather information on the current housing situation and the extent and
quality of housing services provision. Questions covered satisfaction with current
housing, tenure status, membership in housing associations, access to housing services,
characteristics of households that have accessed housing services, factors that enhance or
restrict access, and levels of satisfaction with specific aspects of housing services.
10. The survey results are analyzed by geographic area,10 urban and rural residence,
and by two measures of poverty status of households. The first measure classifies
households into the bottom 30%, middle 30%, and top 40% based on household
expenditures, referred to hereafter as the poor, the middle-income group, and the rich,
respectively. The second measure classifies households as housing poor, housing
borderline, and housing not-poor, based on self-rating by the respondents on their current
housing conditions. In this chapter, most of the analysis will be based on the first
measure (expenditure poverty), with occasional reference to the second measure (self-
rated housing poverty), where appropriate.
11. The survey results are also tabulated by gender of household head and gender of
respondent. In general, gender differences were not significant in the housing module;
thus gender, as a category, was not included in the discussion of the findings. However,
there were gender differences in house and residential land ownership, satisfaction with
current housing, and membership in housing associations. These are presented in Box 1.
10 Aggregate Republic of the Philippines (RP), National Capital Region (NCR), rest of Luzon (or Balance
Luzon), Visayas, and Mindanao.
Filipino Report Card on Pro-Poor Services 74
Chapter V: Housing
Box 1. Gender Analysis
. Among the six modules covered in the Report Card survey," it was only in the housing module that
the proportion of male respondents was greater than that of female respondents (56% vs. 43%).
. Residential land and house ownership. The proportion of male-headed households (77%) that own
either house and land or house only is about the same as that of female-headed households (76%). The
nearly equal distribution in ownership characteristics between female-headed households and male-headed
households points to the cultural prescription in Filipino bilateral kinship systems for equal inheritance
between women and men.'2 Moreover, when women are (or become) heads of households, they appear to
sustain or acquire ownership of house and land or of house only, presumably as part of their economic
security strategy.
A higher proportion of female-headed households (61%) own the land on which their house is built,
compared to male-headed households (57%). Again, one might speculate that women heading households
give greater attention to ensuring residential land ownership, or that a significant proportion may be older
widows whose husbands died leaving them the residential land intact.
* Satisfaction with current housing. Female-headed households are more satisfied than male-headed
households with their current housing.13 This is probably attributable to the house as a wife's/woman's
traditionally assigned domain of responsibility. Any expressed dissatisfaction towards it on her part might
be construed as a negative reflection of her own household management abilities. Moreover, since women
are generally also tasked with household budgeting, they are more realistic about the problem of stretching
the limited funds to meet a wide range of household needs, including further home improvements.
. Membership in housing associations. In male-headed households, the net satisfaction scores for
current housing are higher for households that are members of housing associations (0.96), than for non-
member households (0.90). On the other hand, in female-headed households, the net satisfaction scores for
current housing are lower for member households (0.90), than for non-member households (1.13). This
pattem is consistent with conventional wisdom that it is the Filipino mnale who is expected to take a formal
leadership role linking the family to the larger community.'4 Perhaps the men take more seriously their
involvement in housing associations and the possibilities these offer to improve their current housing
situation.
4. CLIENT ASSESSMENTS OF CURRENT HOUSING
12. This section presents an overview of the present housing situation in the
Philippines based on respondents' assessments 5 and other indicators such as tenure.
Self-rated Housing Poverty
13. Half the sample households consider themselves to be housing poor'6 (see Table I
below). Self-identification as housing poor is interpreted to mean that the respondents
" Housing, water, rice, education, health and the Lingap Program.
12 Virginia Miralao, 1992. "Female-headed Households in the Philippines." Philippines Sociological
Review, 40:1-4 (January-December).
'3 The net satisfaction score (NSS) for female-headed households is 1.11. In comparison, the NSS for
male-headed households is 0.90.
14 Mary Hollnsteiner-Racelis. 1981. "The Husband," in Being Filipino: Writings, edited by Gilda Cordero-
Fernando, Quezon City: GCF Books.
" Respondents rating themnselves as housing poor (or not) and levels of satisfaction with current housing.
Filipino Report Card on Pro-Poor Services 75
Chapter V: Housing
consider their present housing as inadequate or in need of major improvement. An
additional 34% consider themselves as borderline housing poor, bringing the proportion
of Filipinos who rate their housing poorly to 84%.
Table 1: Self-rated Housing Poverty
(in percentage of respondents)
Region/Area Self-rated Housing Poor
RP 50%
NCR 26%
Balance Luzon 46%
Visayas 63%
Mindanao 63%
Urban 43%
Rural 62%
14. Of the regions, self-rated housing poverty is highest in Visayas and Mindanao
(both at 63%) (see Table I above). It is worth noting that these regions have a higher
poverty incidence than NCR and Balance Luzon. Specifically, NCR has the smallest
proportion of households (26%) that consider themselves poor by housing, followed by
Balance Luzon (46%).
15. Among urban households, 43% consider themselves as housing poor whereas
62% of rural households rank themselves as housing poor (see Table 1 above). This
means that the level of housing need according to people's own assessments is relatively
high overall, and is particularly high among rural households, and those who live in
Visayas and Mindanao. It is evident from secondary information that more poor
Filipinos live in rural areas, and in Visayas and Mindanao.
Satisfaction with Current Housing
16. The results of the Report Card survey show that satisfaction with current housing
in the Philippines is generally low at 0.96 (see Table 2 below), which confirms the above
finding that a significant majority of Filipinos rate their housing poorly.
17. Among the four regions, households in Visayas and Mindanao gave the lowest
satisfaction ratings for their current housing (0.87 and 0.67, respectively), supporting the
above finding that self-rated housing poverty is highest in Visayas and Mindanao (see
Table 2 below). These scores are lower than the national satisfaction rating of 0.96. As
mentioned, Visayas and Mindanao have higher incidence of poverty compared to NCR
and Balance Luzon. This leads one to infer that low satisfaction with current housing
may be related to poverty.
16 While only 30% of the households are considered expenditure poor, 50% of the households rate
themselves as housing poor, indicating rnany of the households with inadequate housing have incomes
above the poverty line. The same point is made in "Raising Living Standards of the Urban Poor," A
Strategy to Fight Poverty: Philippines, The World Bank, 1996.
Filipino Report Card on Pro-Poor Services 76
Chapter V: Housing
Table 2: Net Satisfaction with Current Housing
Region/Area Net Satisfaction Score
RP 0.96
NCR 0.99
Balance Luzon 1 .11
Visayas 0.87
Mindanao 0.67
Urban 0.99
Rural 0.90
Note: Net Satisfaction Score: 2-Very satisfied; I-Somewhat satisfied;
0-Undecided; -1-Somewhat dissatisfied; -2-Very dissatisfied
18. Urban residents are slightly more satisfied with their housing than rural dwellers
(0.99 vs. 0.90, respectively) (see Table 2 above). This also confirms the finding that a
larger proportion of rural households rank themselves as housing poor, rather than urban
households.
19. The relationship between satisfaction ratings and poverty levels is seen again in
the data on expenditure groups (see Table 3 below). The poor show a lower net
satisfaction rating than the non-poor, with the poor having the lowest satisfaction score
(0.87) of the three expenditure groups. Moreover, combining the net satisfaction score of
the poor with that for the middle-income households (0.89) yields a mean score of 0.88,
which is markedly lower than the net satisfaction score of the rich (1.08). Clearly,
households on the lower rungs of the socio-economic ladder express stronger
dissatisfaction with their housing situation, than those on the upper end of the expenditure
scale.
Table 3: Net Satisfaction with Current Housing
Poverty Group Net Satisfaction Score
RP 0.96
Poor 0.87
Middle-Income 0.89
Rich 1.08
Note: Net Satisfaction Score: 2--very satisfied; I--Somewhat satisfied;
0--Undecided; -1--Somewhat dissatisfied; -2--Very dissatisfied.
20. As mentioned earlier, urban residents are slightly more satisfied with their
housing than rural dwellers (0.99 vs. 0.90). However, this trend is not true of poverty
groups within urban and rural locations (see Table 4 below). The urban poor appear to be
somewhat less satisfied than the rural poor (0.85 vs. 0.89, respectively). Moreover, the
net satisfaction scores of the poor and the middle-income households in the urban areas
(0.85 and 0.86, respectively) are significantly lower than the net satisfaction score of the
urban rich (1.12). This suggests that while urban residents in general may enjoy better
housing than rural residents, the urban poor are not necessarily as satisfied in terms of
housing as their rural counterparts, and are much less satisfied compared to their
wealthier urban neighbors.
Filipino Report Card on Pro-Poor Services 77
Chapter V: Housing
Table 4: Net Satisfaction with Current Housing
Area/Group Net Satisfaction Score
RP 0.96
NCR-Poor 0.64
Urban-Poor 0.85
Urban-Middle-Income 0.86
Urban-Rich 1.12
Rural-Poor 0.89
Note: Net Satisfaction Score: 2--Very satisfied; I--Somewhat satisfied; 0--Undecided;
-1--Somewhat dissatisfied; -2--Very dissatisfied.
21. This finding is consistent with the generally recognized fact that the poor in cities
typically find housing accommodations in very crowded neighborhoods that do not have
water and sanitation facilities. Higher land costs in urban areas have meant that the
typical mode of housing among the urban poor involves building one's own house,
usually very small, or renting a house or room on land that is occupied illegally, or
without the consent of the owner. The insecurity associated with illegal occupancy of the
land (termed as "squatting") discourages the urban poor from investing in the
improvement of their physical dwelling as the risk of eviction is ever present.'7
Moreover, the high cost of other basic necessities such as food, clothing, and
transportation in urban centers compared to rural areas means that a smaller part of the
household expenditure of the urban poor is devoted to housing facilities.18 These factors
may, in part, explain the marginally lower quality of housing among the urban poor
compared to the rural poor.
22. Among the poor, those residing in NCR exhibit the lowest satisfaction with
current housing (see Table 4 above). The poor in NCR have a net satisfaction score of
0.64, which is much lower than the overall average for the urban poor (0.85), as well as
the rural poor (0.89). Again, this is consistent with the above-cited observation that
quality of housing of the urban poor is greatly constrained by the lack of security of land
tenure. For the poor in NCR, this problem is compounded by higher population densities,
skyrocketing land costs,19 and the constant fear of demolition/eviction, especially due to
7 Denis Murphy and Ted Afiana, "Evictions and Fear of Evictions in the Philippines," Environment and
Urbanization, Vol. 6, No. 1, 1994; Urban Poor Associates (UPA), "Philippine NGO Report on the
Implementation of the International Covenant on Economic, Social and Cultural Rights Concerning the
Right to Adequate Housing," report submitted to the UN Economic, Social and Cultural Commission, in
cooperation with Partnership of Philippine Support Service Agencies (PHILSSA), April 1995.
18 Urban Research Consortium, 1998. "Metro Manila Urban Poor Housing Study." Paper comnniissioned
by the Overseas Economic Cooperation Fund. Quezon City.
19 Previous studies on housing indicate that the land market in the Philippines, especially in Metro Manila
(Keyes, 1979; Blunt and Strassmann, 1993, 1994; URC, 1998), is one of the most dysfunctional in the
world. In fact, this problem has created a gap between available urban housing packages and the limited
incomes of even median income families. This results in a situation in which land alone, without a house,
tends to exceed the nornal affordability standard of two and a half years salary for a family's house and lot.
Escalating land prices in Metro Manila and the inflated high demand for urban land may be traced to a
number of factors: (t) the traditional view that land is a stable form of investment with higher return than
the stock market, and (2) the increased demand for land by the business community and the entry of
external capital for business and infrastructure-related development as part of the effects of globalization
(Porio, 2000:5).
Filipino Report Card on Pro-Poor Services 78
Chapter V: Housing
20
large infrastructure projects. 0 Perhaps, this explains the percentage shift over the last
decade from Metro Manila as a preferred migrant destination to small and medium-sized
cities, where a number of urban mayors have taken positive action to upgrade urban poor
21
settlements or re-house residents in not-too-distant resettlement sites.
Land Tenure
23. While 58% of Filipino households own the land on which their house stands, 78%
of households own the house in which they live. Thus, 20% of the families own the
house, but the land is either rented or used for free (with or without the consent of the
22
owner). Across all regions and expenditure groups, house ownership is more common
than land ownership.
24. Among the regions, Visayas and Mindanao have the largest proportion of
households who own the house but not the land on which it is located: 41% and 29%,
respectively, compared with 11% of households for Balance Luzon and 2% for NCR (see
Table 5 below). This suggests that in Visayas and Mindanao, there is a greater and more
urgent need for providing security of land tenure through land ownership. A land
distribution program for housing in these regions would have a major positive impact on
poverty reduction in these regions, where poverty incidence is high. Moreover, land
costs in these regions are relatively lower.
Table 5: Own House But Not Land
Region Percentage Net Satisfaction Score
RP 20 0.96
NCR 2 1.08
Balance Luzon 11 1.11
Visayas 41 0.87
Mindanao 29 0.67
Note: Net Satisfaction Score: 2-Very satisfied; I--Somewhat satisfied; 0--Undecided;
-1--Somewhat dissatisfied; -2-Very dissatisfied
25. Among the regions, Visayas and Mindanao, which have the highest proportion of
households owning house but not residential land, also have the lowest satisfaction
ratings with current housing, at 0.87 and 0.67, respectively (see Table 5 above). On the
other hand, Balance Luzon and NCR, which have a lower proportion of households who
own the house but not the land on which it is built, have higher satisfaction ratings at 1.11
and 1.08, respectively. This suggests that a direct relationship exists between land tenure
and satisfaction with one's housing: the higher the proportion of households owning the
house, but not the land on which it is built, the higher the dissatisfaction with current
housing. Thus, land tenure is of critical importance to satisfaction with one's housing.
20 Urban Research Consortium, 1998. "Metro Manila Urban Poor Housing Study." Paper commissioned
by the Overseas Economic Cooperation Fund. Quezon City.
21 Mary Racelis, "Fighting Urban Poverty in Asian Cities through Effective Partnership," a paper presented
at the Asian Mayor's Forum: Fighting Urban Poverty, Shanghai, People's Republic of China, June 26-29,
2000.
22 This is confirmed by the findings of the 1998 Annual Poverty Indicators Survey. See Final Report, 1998
Annual Poverty Indicators Survey, National Statistics Office, Republic of the Philippines.
Filipino Report Card on Pro-Poor Services 79
Chapter V: Housing
26. Residential land ownership follows expenditure trends (see Table 6 below).
Among the poor households, only 53% own the land on which their house stands, with
the proportion going up to 58% for the middle-income group, and further rising to 62%
for the rich. On the other hand, house ownership, while higher than land ownership
among all groups, appears to exhibit a reverse trend. The proportion of poor households
that own their house is higher (at 81%) than corresponding figures for the middle-income
households (77%/o), and the rich households (76%). Evidently, house ownership is a core
priority among the poor.
Table 6: Ownership of Land and House
Own Land Own House
(% of HH (% of HH
Poverty Group in group) Net Satisfaction Score in group)
RP 58 0.96 78
Poor 53 0.87 81
Middle-Income 58 0.89 77
Rich 62 1.08 76
Note: Net Satisfaction Score: 2--Very satisfied; 1--Somewhat satisfied; 0--Undecided; -1--Somewhat dissadsfied;
-2--Very dissatisfied.
27. That house ownership is highest among the poor, but residential land ownership is
lowest among them, is explained in large part by the high cost of land, especially in
23
cities. Family income in the Philippines has not been increasing adequately to cope
with the inflation in land prices, which increased by as much as 25% annually in real
terms.24 The poor simply cannot afford to purchase land in the city. On the other hand,
the high incidence of house ownership among the poor reflects the relative ease of
constructing a makeshift house on open, unguarded land.25 Moreover, for those with
some disposable income, a small house in the city, which can be improved gradually as
the family's economic situation improves, requires much less of an initial financial outlay
than purchase of land in the city. This finding further underscores the capacity of the
poor to build their own house with minimal financial assistance, mostly from relatives or
neighbors.
28. An examination of the net satisfaction scores of the expenditure groups again
establishes the direct relationship between land tenure and satisfaction with one's housing
(see Table 6 above): the lower the proportion of households owning residential land, the
lower the satisfaction rating given to current housing by that poverty group. The poor
who have the smallest proportion of households owning land (53%), have the lowest
satisfaction rating (0.87). In contrast, the rich who have the largest proportion of
23 William Keyes, "Economic Development and the Housing Problern," Philippine Studies, 27 (1979);
Urban Poor Associates; "Philippine NGO Report on the Implementation of the International Covenant on
Economic, Social and Cultural Rights Concerning the Right to Adequate Housing," Urban Research
Consortium; "Metro Manila Urban Poor Housing Study," Urban Research Consortium; "Study of Land
Values in Metro Manila and Their Impact on Housing Programs," unpublished report to the Alger
Foundation, Quezon City, 1998.
24 Anna Marie Karaos, "An Assessment of the Government's Social Housing Program," ICSI Occasional
Paper # I (Quezon City: Institute on Church and Social Issues, May 1996).
25 Mary Hollnsteiner-Racelis, "Becoming an Urbanite," in The City as a Center of Change in Asia, ed. by
D.J. Dwyer (Hong Kong: Hong Kong University Press, 1972).
Filipino Report Card on Pro-Poor Services 80
Chapter V: Housing
households owning land (62%), have the highest satisfaction rating (1.08). This once
again confirms the finding that land tenure is a significant determinant of satisfaction
with one's housing.
Box 2. The Community Mortgage Program
The Community Mortgage Program (CMP) is singularly the most responsive government program that
addresses the urban poor's need for security of tenure and housing. It is an innovative housing finance
program that makes available affordable loans for land acquisition, infrastructure development, and house
construction to the urban poor.
The innovative aspect of CMP lies in providing the urban poor with their basic need: access to urban land
with security of tenure and without collateral. This is an improvement over the earlier solution of
providing loans for house and land acquisition, inasmuch as the poor, who have low income, could not
avail of them. Thus, whether on-site or off-site development (voluntary relocation), CMP is a program for
legalizing the tenure of squatters.
Urban poor families can avail of financial assistance from CMP after organizing themselves into a
community-based organization and registering as a homeowners association. The program requires a
"mediator" who functions as the originator of loans and is responsible for making sure that amortization are
paid. Both government (National Housing Agency or local government units) and non-government
institutions (NGOs, socio-civic organizations, or private banking institutions) can assume this role.
The program integrates the approaches of land acquisition and security of land tenure, slum upgrading, and
housing improvement since the loan can be used for any of three purposes: (1) land acquisition, (2) site
development, and (3) house improvement. However, almost all loans are used mainly for land
acquisition since most regularized communities prefer to incrementally build their own housing. The CMP
also combines community organizing, cornrunity savings mobilization, and people emnpowerment
processes to enable the conmnunity to comply with the terns of the loan.
And because of its innovative features, CMP has the highest repayrnent rate comnpared with other housing
programs of the government. Evaluation studies have found it to be well targeted to the poor. As of April
2000, the Program had already reached 94,000 households in 792 urban and rural low-income
communities.
29. In this context, housing programs that focus on security of land tenure rather than
26
on house construction or the provision of built housing would seem most appropriate.
This may explain the relative success and effectiveness of national government housing
programs such as the CMP and home-lot distribution programs implemented by some
local governments (e.g., San Carlos City, Marikina).27 These programs are specifically
designed to enable individual households and/or communities to gain security of tenure
26 A 1996 World Bank study reconmnended that "the governments should reconsider spending scarce public
resources building houses and subsidizing construction through tax breaks. To imnprove housing and living
conditions of the poor, the government's aim should be to provide security of land tenure and provision of
essential services, leaving people to build their own houses." A Strategy to Fight Poverty: Philippines, The
World Bank, 1996.
27 For a discussion of local governnent housing efforts see Anicia C. Sayos, Ross Q. Quisao and Rosario
Manasan, "Local Efforts in Housing," PIDS Discussion Paper Series No. 98-44, December 1998; and
Anna Marie Karaos, "Decentralization, Local Governance and Urban Poverty in Four Philippine Cities."
Paper subrnitted to the World Bank, 2000 (photocopy).
Filipino Report Card on Pro-Poor Services 81
Chapter V: Housing
on land (by means of land ownership), while construction of the house is left to the
individual families (see Box 2 above).
Satisfaction with Specific Aspects of Housing
30. Respondents were asked to rank their satisfaction on ten specific characteristics of
their housing (see Table 7 below). The aspects of housing with which Filipino
households are least satisfied are building materials used in house construction (0.67),
physical environment in which the house is located (0.84), size of the house (0.88), and
security from weather problems (0.94).
Table 7: Net Satisfaction with Specific Aspects of Housing
Housing Aspects28 RP Urban Rural
Size of house 0.88 0.92 0.83
Building materials 0.67 0.71 0.62
Location of house relative to the
following:
Physical environment 0.84 0.82 0.86
Place of work 1.03 1.14 0.88
Public facilities 1.11 1.39 0.68
Public services 1.22 1.43 0.90
Security from theft 1.05 0.98 1.16
Security from weather 0.94 0.93 0.96
Personal safety 1.21 1.19 1.25
Level of privacy 1.19 I.11 1.32
Note: Net Satisfaction Score: 2--Very satisfied; 1--Somewhat satisfied; 0--Undecided;
-1--Somewhat dissatisfied; 2--Very dissatisfied.
31. On the other hand, respondents indicate that they are more satisfied with the
location of their house relative to public services (1.22), personal safety (1.21), and level
of privacy (1.19) (see Table 7 above).
32. There are prominent urban-rural differences, with urban households more
satisfied than rural households in relation to access issues, like location of house relative
to place of work (urban: 1.14 vs. rural: 0.88), public facilities (1.39 vs. 0.68), and public
services (1.43 vs. 0.90). Rural households show greater satisfaction than urban
households on security from theft (1.16 vs. 0.98) and level of privacy (1.32 vs. 1.11) (see
Table 7 above). Thus, the positive trade-off seen by rural migrants moving to cities is
evident: better access to workplace, public facilities, and public services against the
decline in security and privacy. This affirms the experience of urban poor settlers, who
for decades have resisted government efforts to resettle them to distant out-of-city
resettlement sites where, until very recently, employment and services have been in short
supply.
28 Building materials refer to materials used in building the house such as roof, wall and floor; physical
environment to location of house relative to garbage dump, canal, railroad, flood-prone area, or polluting
establishments; place of work to location of house relative to place of work or other means of livelihood;
public facilities to location of house relative to such facilities as markets, school, health facility, road, etc.;
public services to location of house relative to such services as water supply, public transport, electricity,
etc.; and security from weather to such phenomena as typhoons, storms, etc.
Filipino Report Card on Pro-Poor Services 82
Chapter V: Housing
33. The urban-rural differences are particularly significant among the expenditure
poor within these locations, as can be observed in Table 8 below. The urban poor
expressed the highest satisfaction on the following aspects of housing: closeness to public
services (1.45), closeness to public facilities (1.36), personal safety (1.36), and proximity
to place of work (1.22).29 This suggests that the access factors are highly valued by the
urban poor and to a considerable extent enhance the desirability of their cuTrent
housing.30
Table 8: Net Satisfaction with Specific Aspects of Housing
Housing Aspects RP Urban Poor Rural Poor
Size of house 0.88 0.85 0.82
Building materials 0.67 0.63 0.63
Location of house relative to the
following:
Physical environment 0.84 0.83 0.83
Place of work 1.03 1.22 0.99
Public facilities 1.11 1.36 0.50
Public services 1.22 1.45 0.78
Security from theft 1.05 1.05 1.11
Security from weather 0.94 0.97 0.90
Personal safety 1.21 1.36 1.29
Level of privacy 1.19 1.16 1.29
Note: Net Satisfacton Score: 2--Very satisfied; 1 --Somewhat satisfied; 0--Undecided; -1 --Somewhat dissatisfied;
-2--Very dissatisfied.
34. On the other hand, among the rural poor, access factors are rated very low (see
Table 8 above). The lowest satisfaction scores are given by the rural poor to the
closeness of their house to public facilities (0.50), building materials (0.63), closeness to
public services (0.78), while the higher rated factors are personal safety (1.29), level of
privacy (1.29) and security from theft (1.1 1). The low scores given to the access factors
only confirm the widely known fact that rural areas receive poor basic services and
infrastructure.3' Aside from improving simply the physical aspects of the house (e.g.,
size, building materials, and physical environment), a significant improvement in client
satisfaction may be achieved by bringing public services, facilities, and jobs to rural
households.
29 It is significant to note that aspects of housing related to access (i.e., closeness to work, public services
and public facilities) are generally rated more highly by urban poor respondents than by all respondents as a
whole (aggregate RP).
30 Analysis of early registers in the neighboring pueblos of Manila has already established the advantage of
urban roots or proximity to urban areas in tapping into work opportunities and important social networks
that facilitate access to jobs. To appreciate the early historical patterns of work and migration to the City of
Manila, see Daniel F. Doeppers, "Migrants in Urban Labor Markets: The Social Stratification of Tondo and
Sampaloc in the 1 890s," in Population and History: The Demographic Origins of the Modern Philippines,
ed. Daniel Doeppers and Peter Xenos (Quezon City: Ateneo de Manila University Press and University of
Wisconsin-Madison).
" This observation has been articulated as early as the late 1970s in a study by Madeleine A. Sembrano,
Sonia Imperial and Nestor S. Felix, "Case Studies on the Improvement of Slums, Squatters and Rural
Settlements," a report submitted to the United Nations Centre for Housing, Building and Planning and the
Institute of Philippine Culture, Quezon City, 1977.
Filipino Report Card on Pro-Poor Services 83
Chapter V:. Housing
5. CLIENT ASSESSMENTS OF HOUSING SERVICES
35. The first part of this chapter presented an assessment of the housing situation in
the Philippines from the perspectives of Filipinos. The next part focuses on the reach of
government and non-govemment housing assistance services, identifying critical factors
that presently constrain the delivery of, and access to, these services, as well as the
groups that are under-served, and the reasons for their exclusion.
36. Existing housing programs (non-govemment and government) reach a very small
proportion of the population in general, and even a smaller proportion of the poor that are
in dire need of housing assistance. Only 118 of the 1,200 sample households, or 10%,
have ever applied for or been offered housing assistance. Of the 118 households, 32%
did so as a consequence of government relocation decisions (e.g., the land they were
occupying was needed for a govemment project). For only 68% of the 118 households,
the decision to seek housing assistance was voluntary.
37. When analyzed according to urban and rural residence, the distribution of housing
assistance is very lopsided in favor of urban households (see Table 9 below). Thirteen
percent of urban households have applied for housing assistance, as compared to only 4%
of rural households. The approval rate of urban applications is also much higher as
compared to rural applications. Fifty-nine percent of the urban households who applied
for housing assistance had their applications approved, as compared to only 43% of rural
households.
Table 9: Applied for and Approved Housing Assistance
Total Applied/
Offered Assistance Approved Assistance*
% of HH that Applied or were
Area % of HH Offered Assistance
RP 10 56
Urban 13 59
Rural 4 43
*Includes those whose applications were approved by the provider and accepted by the beneficiary and those whose
applications were approved by the provider but rejected by the beneficiary.
38. Further, 95% of the beneficiaries of govermnent housing assistance to date have
been urban households, compared to only 5% of the rural residents (see Table 10 below).
It is fair to conclude that rural residents are excluded from government housing
assistance.
Filipino Report Card on Pro-Poor Services 84
Chapter V: Housing
Table 10: Approved and Accepted Housing Assistance Applications from Government*
% of Total that
Area Accepted Assistance
RP 100
Urban 95
Rural 5
*Includes only those whose applications were approved by the govemment source and
accepted by the beneficiary.
39. The anti-poor bias in the distribution of housing assistance, especially government
housing assistance, is also evident (see Table 11 below). Only 6% of the poor
households applied for housing assistance, as compared to 9% of the middle-income
group and 14% of the rich. The approval rate of the applications of the non-poor is also
much higher than that of the poor. Whereas 48% of the applications of the poor were
approved, 53% of the applications of the middle-income households and 60% of the
applications of the rich were approved.32
Table 11: Applied for and Approved Housing Assistance
Total Applied/Offered
Assistance Approved Assistance*
% of HH
that Applied or were
Poverty Group % of HH Offered Assistance
RP 10 56
Poor 6 48
Middle-income 9 53
Rich 14 60
*Includes those whose applications were approved by the provider and accepted by the beneficiary and those whose applications were
approved by the provider but rejected by the beneficiary.
40. Moreover, only 21% of beneficiaries of government housing assistance have been
the poor, as compared to 32% of the middle-income households and 47% of the rich (see
Table 12 below). These findings show that a majority of those who benefited from
government housing assistance to date are the non-poor.
Table 12: Approved and Accepted Housing Assistance Applications from Government
% of Total that
Poverty Group Accepted Assistance
RP 100
Poor 21
Middle-Income 32
Rich 47
*Includes only those whose applications were approved by the government source and accepted by the beneficiary.
32 These findings are consistent with concerns expressed in the 1997 Housing Finance Study (Llanto, et. al.,
1997) that programs were not adequately targeted to the poor (see in particular Annex B of the study).
Filipino Report Card on Pro-Poor Services 85
Chapter V: Housing
41. The Report Card, therefore, indicates that more than four-fifths of govemment
housing assistance is being captured by the better-off. This confirms the conclusions of
an independent evaluation of the National Shelter Program that a large percentage of
loans made by various housing finance institutions go to middle- and higher-income
households and fail to reach the bulk of the intended low-income beneficiaries.33
42. In summary, the groups that have sought housing assistance services the most are
the non-poor (middle-income plus rich) and urban households. Conversely, those that
seem to have least sought housing assistance services are the poor and rural households.
A cause for even greater concern is that the groups that have benefited most from
government housing assistance services are the wealthy and urban households.34 The
poor and rural households, who are in the greatest need of such assistance, are largely
excluded.
Reasons for Exclusion
43. Lack of Information. The Report Card survey is able to pinpoint the reasons
why the poor and rural households are least able to access government housing assistance
services. The critical factor appears to be lack of information. When asked about the
main reasons for not applying for housing assistance, respondents prioritized the
following as their top three reasons (see Table 13 below): (i) lack of awareness of
govemment housing schemes (29%); (ii) lack of knowledge on how to get government
housing assistance (21%); and, (iii) lack of need for housing assistance (20%).
Table 13: Reasons for Not Applying for Government Housing Assistance
(Percentage of households in group)
Not Know Not
Not Aware How to Get Required Expenses Not
Region/Area/Group of Program Assistance Assistance High Eligible
RP 29 21 20 7 4
NCR 9 20 29 10 5
Balance Luzon 32 23 20 9 3
Visayas 37 18 15 5 5
Mindanao 30 21 20 5 4
Urban 24 21 22 9 4
Rural 37 22 18 5 4
Poor 36 26 14 6 5
Middle-Income 32 22 19 7 3
Rich 22 17 27 9 4
Note: Only those reasons with consistently high scores appear in the table.
33 Urban Research Consortium, "Study of Land Values in Metro Manila and Their Impact on Housing
Programs", Asian Development Bank, Urban Sector Profile: Philippines (Manila: ADB, 1999).
34 According to the Philippines Poverty Assessment, "public housing is highly regressive, benefiting mainly
non-poor households in urban areas."
Filipino Report Card on Pro-Poor Services 86
Chapter V: Housing
44. Among the regions, NCR, at 29%, has the lowest proportion of households that
cited lack of awareness35 as a reason for not applying for housing assistance. On the
other hand, more than half the households in Balance Luzon (55%), Visayas (55%), and
Mindanao (51%) were not aware of government schemes for housing assistance and/or
how to access them (see Table 13 above). Put another way, NCR households are much
better informed than those in the other regions about government housing assistance
schemes, and how to access them.
45. For rural households, the lack of awareness about government housing programs
is also significant, with 59% of the households citing this as the main reason for not
applying for assistance, compared to only 45% of the urban households (see Table 13
above).
46. The data on the three expenditure poverty groups (see Table 13 above) reveal that
the rich have the lowest proportion (39%) of households who are not aware of such
schemes, rising to 55% for the middle-income households, and to 62% for the poor. In
other words, the rich have the greatest access to information on government housing
assistance schemes, whereas the poor -- who need housing assistance most -- have the
least access to such information.
47. In summary, NCR, urban, and non-poor households have better access to
information on government housing services. This, in part, explains why most of the
housing assistance went to these three groups. It is, however, the non-NCR, rural, and
poor households (including within NCR and urban areas), which require this assistance
more.36 These findings point to the need for a systematic information campaign that
targets the groups most in need of housing assistance.
Eligibility Requirements and Transaction Costs
48. Other major reasons cited for not applying for housing assistance relate to issues
of cost and eligibility (see Table 13 above). Both of these issues are closely tied to the
specific nature of the housing assistance. The predominant form of housing assistance
available at present is mortgage finance. Because of this, eligibility requirements and
procedures tend to follow the standards of formal lending institutions, with their
emphasis on proper documentation and income requirements. Often, borrowers are made
to go to the lending agencies, many of which have offices only in NCR or in regional
urban centers, fill out forms and follow-up their applications. These processes tend to be
tedious, time-consuming, and even intimidating to some people, especially the poor.
These represent significant transaction costs for the poor, and the involvement and inter-
mediation of NGOs has partly reduced these costs in the case of the CMP. But it is
conceivable that most lending programs have become inaccessible to the poor for these
reasons, especially in areas where housing NGOs are not present (such as in rural areas).
35 The proportions presented here combine lack of awareness of housing prograrns with lack of knowledge
of how to apply for government housing assistance.
36 The "not required" column in Table 14 clearly demonstrates that a larger proportion of NCR, urban and
not-poor households indicated that they did not need housing assistance. This confirns the finding that
non-NCR, rural, and poor households are in greater need for housing assistance.
Filipino Report Card on Pro-Poor Services 87
Chapter V: Housing
49. As far as eligibility is concerned, lending programs administered by government
pension fund institutions such as the Social Security System (SSS), the Government
Service Insurance System (GSIS), and the Home Development Mutual Fund (HDMF, or
PAG-IBIG) require membership in the schemes for at least two years for borrowers to
qualify for assistance. Many of the poor, both rural and urban, are not members of these
pension funds.37 Again, this explains the larger percentage of housing applications by,
and offers to, the non-poor.
Membership in Housing Associations
50. Only 5% of the sample households confirned they are members of housing
associations, such as government compulsory saving schemes like social security38 and
PAG-IBIG for housing (see Table 14 below). Membership among poor households is
even lower at 3%, as compared to 8% for rich households.
Table 14: Mlembership in Housing Associations
I NiMembers Non-members
Poverty Group Percentage Percentage
RP 5 94
Poor 3 96
Middle-Income 3 96
Rich 8 90
Note: "Members" refer to members of housing cooperatives, housing savings schemes and PAG-IBIG;
'"Non-members" are not members of any association.
51. It appears that members of housing associations have a greater tendency to seek
housing assistance than non-members (see Table 15 below). Specifically, 36% of those
who belonged to housing associations sought housing assistance, as against only 8% of
the non-members. Moreover, members of housing associations have a higher rate of
successful applications: 32% percent of housing association members who applied for
housing assistance accepted the assistance offered, compared to only 22% of the non-
members. It appears that housing association members are more likely than non-
members to benefit from housing assistance. Since an extremely small minority of poor
households (only 3%) are members of housing associations, this limits the poor's access
to benefits of membership, including housing assistance. The exclusion of the poor is
unfortunate, but not altogether unexpected, as the following discussion will explain.
37 The Report Card data reveals that only a very small percentage (5%) of the sample households belong to
housing associations (including PAG-IBIG). See Table 15.
38 SSS for those in the private sector and GSIS for government employees.
Filipino Report Card on Pro-Poor Services 88
Chapter V: Housing
Table 15: Application for and Acceptance of Housing Assistance
(By membership in housing associations)
Applied for Housing Accepted Housing Assistance
Housing Association Assistance
% of HH % of Group that Applied
in group for Housing_Assistance
Members 36 32
Non-members 8 22
Note: "Members" refer to members of housing cooperatives, housing savings schemes and PAG-IBJG; "Non-members"
are not members of any association.
52. Considering that PAG-IBIG membership is mandatory for those employed in the
formal sector and may be voluntarily acquired by informal sector workers, the low level
of overall membership cited is cause for concern (see Table 14 above). Difficulties in
enforcing PAG-IBIG membership may stem from a lack of interest among employed
individuals because PAG-IBIG appears to duplicate benefits already offered by their
social security coverage. In addition, it entails yet another deduction from the already
limited paycheck (income) of households. For those paying membership fees but who
are unable to afford a housing loan (most likely the lower-income households among the
PAG-IBIG members), the housing association contributions may well be construed as
burdensome rather than beneficial.
53. Since membership in government housing and social security systems involves
regular employment, most government housing assistance schemes are limited to
households with formal employment. While notable exceptions like the CMP and
government resettlement projects may be cited, a large number of families who derive
their livelihoods from the informal sector as well as rural producers who have seasonal
incomes are, nonetheless, generally excluded from housing assistance. Lacking regular
employment or social security coverage, most cannot qualify for government housing
assistance (and even less for assistance from the private sector). And, by requiring
regular installment repayments of housing assistance loans, government is in effect
specifying regular income as an eligibility requirement. In so doing, it filters out a
significant segment of the poor from the housing assistance client rosters, many of whom
comprise the informnal sector and have irregular income.
Private Sector Participation
54. The Report Card survey shows that the government is the main source of housing
assistance in the Philippines (see Table 16 below). Seventy-one percent of the
39 The way Pag-IBIG is designed, contributions are about PhP100 to PhP200, but a housing loan is
PhP150,000 plus. Thus, it takes a large number of households' contributions to finance one household's
loan. In practice, Pag-IBIG has over 300,000 outstanding loans, but has about 4.5 million contributors.
Basically, only 8% of members get cheap loans, yet 100% of members must put up with negative real
returns on their mandatory savings contributions (Comment by McDonald P. Benjamin, World Bank staff,
February 28, 2001).
Filipino Report Card on Pro-Poor Services 89
Chapter V: Housing
households who received housing assistance did so from government sources, as
compared to only 29% households who did so from non-government sources.40
Table 16: Approved and Accepted Housing Assistance by Source
Area Government Sources Non-government Sources
Percentage Percentage
RP 71 29
Urban 70 30
Rural* 100 _
*(N=I)
55. Similarly, 70% of urban households who obtained housing assistance, received
this from government sources, as against 30% of urban households who did so from non-
government sources. Rural households, on the other hand, barely received housing
assistance, whether from government or non-government sources: of the 21 rural
households who applied for housing assistance,4' only one accepted the housing
assistance after the application had been approved by the government.
56. The government is also the main source of housing assistance for poor households
(see Table 17 below). The data show that all the poor households who obtained housing
assistance received this from government. In contrast, the rich have a greater tendency
than the other expenditure groups to seek housing assistance from non-govermment
sources: 56% of the rich who accepted housing assistance did so from government
sources, whereas 44% obtained it from other sources. A significant majority of middle-
income households received housing assistance from government sources.
Table 17: Approved and Accepted Housing Assistance by Source
Poverty Group Government Sources Non-government Sources
_____________________________________ Percentage Percentage
RP 71 100
Poor 100
Middle-Income 86 14
Rich 56 44
57. The above findings reveal that the non-government sector is not able to do a better
job than government at reaching households in greater need of housing assistance, such
as rural and poor households. This is cause for concern as it was established earlier in the
chapter that govermment housing assistance is biased against poor and rural households.
58. Overall, the private sector seems to be a minor player in housing assistance at this
point. The level of assistance private lending institutions provide is very small in relation
to their lending capacity, which means that the private sector as a source of housing
40 Non-government sources include NGOs, cooperatives, banks, private informal money lenders, real estate
developers, religious institutions, relatives, etc.
41 Out of a representative sample of 1,200 households.
Filipino Report Card on Pro-Poor Services 90
Chapter V: Housing
assistance is not fully exploited. The limited reach of housing services is, therefore,
partly due to the private sector's low level of participation in the housing sector.
59. The lending portfolios of commercial banks in the Philippines normally have only
a very small percentage going to housing loans. Private lending institutions have claimed
that they are unable to compete with the low interest rates of government home lending
programs, which are subsidized.42 This is one reason, which explains the low level of
participation of the private sector in providing housing assistance in the Philippines.
Comparison of Government and Non-Government Sources
60. According to the client feedback in the Report Card, government housing
programs are generally more affordable, whereas non-government sources of housing
assistance are more efficient and service oriented. Waiting time to receive assistance
figures as a major reason for dissatisfaction with both government and non-government
sources of housing assistance43 (see Table 18 below). For government, this was cited as
the main area of dissatisfaction, while it tied for second place (along with expenses
involved) regarding dissatisfaction with non-government sources.
Table 18: Net Satisfaction with Sources of Housing Assistance
Aspects of Government Sources Aspects of Non-government Sources
Housing Assistance Net Satisfaction Score Housing Assistance Net Satisfaction Score
Waiting time to receive -0.08 Flexibility to 0.13
assistance accommodate financial
needs
Application procedures 0.24 Expenses involved in 0.24
getting assistance and
Waiting time to receive 0.24
assistance
Grievance resolution 0.35 Clarity of payment terms 0.29
process/mechanisms and
Convenience of location 0.29
Note: Net Satisfaction Score: 2--Very satisfied; I--Somewhat satisfied; 0--Undecided; -1--Somewhat dissatisfied;
-2--Very dissatisfied.
61. Government agencies appear to offer more flexible and less expensive payment
terms but exact longer processing and waiting time (see Table 18 above).44 Moreover,
the non-user-friendly application procedures and the grievance resolution mechanisms
leave much to be desired. Non-government entities, on the other hand, appear to offer
more efficient and rapid processing of applications but make their financial payment
packages less flexible and more expensive than government sources. Lower costs, then,
constitute the main advantage of government sources, whereas efficient delivery of
housing assistance represents the relative strength of non-government sources.
42 Gilbert Lianto et. al., "A Study of Housing Subsidies in the Philippines." A Report to the Housing and
Urban Development Coordinating Council (mimeograph); Ceres P. Doyo, "Goverrnent Housing Strategy
Flawed - David." Philippine Daily Inquirer, November 14, 1999.
43 Of the 118 households that applied for housing assistance, 30% have pending applications.
44 Property Barometer in Eduardo A. Morato, Jr., "Strategic Reformulation of the Mass Housing Program:
Focus on Housing for the Masses." (mimeograph).
Filipino Report Card on Pro-Poor Services 91
Chapter V: Housing
Satisfaction with Housing Assistance Services
62. Overall client satisfaction with sources of housing assistance (both government
and non-government) in the Philippines is very low at 0.53. Compared to the other basic
services covered in the Report Card, such as primary education and health, most Filipinos
rate the services provided by sources of housing assistance as relatively unsatisfactory.45
63. One indicator of the relatively low satisfaction with housing services is the
number of approved applications that are eventually rejected by the applicants
themselves. The high rate of rejection of approved applications by the applicants is quite
striking (see Table 19 below). Of the 1 18 households that applied for housing assistance,
56% had their applications approved, 17% disapproved, and 30% pending as of the date
of the survey. Of those households whose applications were approved, the majority
(53%) rejected the housing assistance offered.
Table 19: Success Rates in Housing Assistance Applications
(Percentage of households in group)
Approved
and Approved and Application Application
Area/Group Accepted Rejected Pending Not Approved
RP 26 30 30 17
Urban 31 28 27 18
Rural 5 38 43 14
Poor 29 19 29 29
Middle-Income 22 31 38 13
Rich 28 32 26 15
64. Considering the high rate of disapproval,46 the high rate of rejection by clients of
the housing assistance offered is doubly worrisome. It means that there is actually a very
small proportion, at most only a third of applicants, who actually benefit from housing
assistance (i.e., those whose applications are approved by the agency concerned, and who
in turn accept the assistance offered). This may imply that not only do the housing
programs fail to reach the people in need of housing assistance, but they also apparently
fall short of the expectations of the intended beneficiaries, as evidenced by the high rate
of rejection of the assistance offered.
65. Several possible explanations can be offered for the high rate of rejection.
Although a larger number of the rejected applications were voluntary applications, the
45 Overall satisfaction with government sources of housing assistance is 0.50, while overall satisfaction
with private sources of housing assistance is 0.65. In comparison, overall satisfaction with public
elementary schools is 1.49, while overall satisfaction with private elementary schools is 1.51. And, overall
satisfaction with public health facilities is 1.18, while overall satisfaction with private health facilities is
1.56.
46 17% of the households that applied for housing assistance were disapproved in their application. The
proportion of disapproved applications does not vary significantly between urban and rural areas (18% and
14%, respectively). The key difference occurs between the poor and the rich households, with poor
households having a disapproval rate that is almost twice as high as that of rich households (29% vs. 15%).
This again illustrates an anti-poor bias in sources of housing assistance.
Filipino Report Card on Pro-Poor Services 92
Chapter V: Housing
number of applications involving involuntary resettlement was also sizeable (23%).
Nevertheless, the high rate of rejection in the voluntary category is the more important
finding that needs to be explained. One possible explanation could be that the assistance
came too late. In this case, the applicants might have already obtained help from another
source. Or, the opportunity to purchase a house plot might have disappeared by the time
the application was approved. This is supported by the fact that respondents cited long
waiting time to be the primary cause of dissatisfaction with government housing
programs, and the second most important cause of dissatisfaction with non-government
programs.
66. Rural households exhibit a higher rate of rejection than urban households (38%
vs. 28%, respectively). The higher rate of rejection among rural households could be due
to additional transaction costs associated with accepting approved housing assistance,
such as the difficulty of traveling long distances to urban centers to make monthly
payments and additional paperwork. It is conceivable that the anticipated transaction
costs, coupled with the late assistance, reduces the attractiveness of the housing
assistance being offered to rural clients.
6. KEY FINDINGS AND RECOMMENDATIONS
67. Housing is indispensable to poverty reduction. The housing situation in the
Philippines, as seen from the perspective of ordinary Filipinos, requires significant
improvement -- 84% of Filipinos rate their housing poorly. Poor households and
households in poorer areas (e.g., Mindanao and rural areas) are consistently and
significantly more dissatisfied with their housing than the rich. This indicates that a
poverty reduction strategy must necessarily emphasize the improvement of housing.
68. Targeting. Data from the Report Card survey reveal that government housing
assistance prograrns are barely reaching the poor. There is an obvious mismatch between
the present distribution of housing services, which is biased in favor of non-poor
households in NCR and other urban areas, and the distribution of those in urgent need of
housing assistance, the large majority of whom are poor households in rural and urban
areas.
69. To help ensure that housing assistance is directed to the poor, housing agencies
should be encouraged to set targets (e.g., number/proportion of households assisted) for
each income group, with the poor having a larger share of such assistance. These targets
should be set after thorough consultations within the housing agencies themselves,
involving particularly the frontline staffers. The targets should be feasible, and the
lending agencies should realize that increasing the targets would mean changes in the
47~~~~~4
way they operate.4
47 For instance, frontline staffers will very likely need to go out and inform prospective clients of the
availability of loans, help them prepare the documents that are necessary, and in general help the applicants
get through the bureaucratic maze. This means that the housing agencies should be willing to increase the
allocation of funds for frontline staffers.
Filipino Report Card on Pro-Poor Services 93
Chapter V: Housing
70. Exclusionary factors result in the neediest groups being the most under-served.
Among these factors are: (i) the lack of information on housing assistance programs and
how to access them; (ii) the strong emphasis on mortgage finance as the primary form of
housing assistance; (iii) a highly centralized service delivery system which increases the
transaction costs of assistance; (iv) eligibility requirements that discriminate against the
poor and those employed in the informal and rural sectors; and (v) excessively long
(waiting) time for processing applications.
71. In giving priority to reaching the poor, the neglect of rural housing must be
remedied. A significant proportion (63%) of the housing poor are found in Visayas and
Mindanao, where rural areas predominate. Given the gross imbalance between urban and
rural areas in the delivery of housing services, there is a need to reconfigure the
govermment's housing program to give it a stronger rural orientation. It is important to
ensure that the programs that are being supplied are tailored to the needs of rural
communities. For instance, it may be more important to first address the shortcomings in
public services/facilities identified in rural areas rather than home construction
requirements. Among the strategies could be encouraging housing agencies to work
more closely with local governments and congress persons who have access to
development funds provided by the internal revenue allotment and the countrywide
development fund.48 Mechanisms for the selection of beneficiaries must be carefully
designed to prevent resorting to patronage-based modes of distributing housing
assistance.
72. Primacy of security of land tenure. The primacy of secured land tenure as a
determinant of housing satisfaction is underscored by the survey findings. Inasmuch as a
sizeable proportion of the sample households do not own the land on which their house is
built, a form of assistance that provides security of tenure on residential land is greatly
needed. Government housing assistance programs must therefore make the provision of
secure tenure on house plots a major objective.
73. There is a high proportion of households who own their house but not the land on
which it is built, many of them in Visayas and Mindanao. This may partly explain why
levels of dissatisfaction with current housing are higher for these two regions. House
ownership without land ownership is likewise the situation of many urban poor
households illegally occupying public and privately owned lands. All this points to the
fundamental importance of providing security of land tenure to enhance housing
satisfaction.
74. The results indicate that house ownership is highest among the poor, although
land ownership is lowest among them, particularly the urban poor. Given the finding that
dissatisfaction with current housing is highest among the urban poor, we can safely
conclude that dissatisfaction is directly linked to the absence of secure land tenure. As
pointed out earlier, this stems most likely from high land prices in cities. The apparent
high rate of house ownership among the poor, including the urban poor, is evidence of
48 There is a need to upgrade the service delivery capacity of LGUs, particularly in housing. Building this
capacity should be a priority of central agencies.
Filipino Report Card on Pro-Poor Services 94
Chapter V: Housing
their capacity for self-built housing, even though the quality of the house may leave much
to be desired. These facts present two implications for policy. One is that government
housing programs would do well to capitalize on the poor's ability to build their housing.
Programs need to be redesigned to make it possible for poor people, especially those who
cannot afford heavy amortization payments, either to construct their own dwelling
structures under the qualified supervision of housing authorities, or to offer their labor as
sweat equity.
75. A second policy implication is that if security of tenure is to be provided to as
many among the poor as possible, changing existing land policies becomes mandatory.
Because housing tenure is closely tied to land tenure, policies and mechanisms are
needed that would more effectively regulate land use in order to free up land for housing
the poor who normally have no access to the formnal land market. This can be done
through appropriate zoning ordinances and land tax policies.49 In the case of cities, local
governments are empowered to zone and designate sites for socialized housing under the
Urban Development and Housing Act. The zoning powers need to be filly utilized by the
local governments to expand the supply of cheap land to the urban poor.50 However,
although the cities in the Philippines are empowered to rezone land, few of them actually
have the institutional and technical capacities to plan and implement such zoning
changes. Far more attention is required to build local government capacity. The Housing
and Land Use Regulatory Board must be more active in assisting local governments in
this regard.
76. Community Mortgage Program. Programs premised on the provision of
secured land tenure such as the CMP seem to be on the right track in addressing the
priority problems of the poor. However, the CMP suffers from at least two limitations in
light of the survey results. First, the program is still very centralized in Metro Manila.
This means that even the CMP is not well-equipped to service adequately the urban poor
outside Metro Manila (i.e., NCR). Moreover, its operations are limited to urban centers,
thereby excluding rural households.
77. The second limitation of the CMP is that its effectiveness is hampered by rising
land costs in highly urbanized centers. Programs like the CMP seem to be appropriate
and effective in provincial cities and secondary towns where land costs are not so high.
Yet the present distribution of CMP projects is concentrated in NCR and Balance Luzon.
78. At present, CMP is the only lending program that the poor are able to access.
Funds for the CMP are taken from the national government budget. A major problem
experienced by borrowers of CMP is the very long waiting time for projects to be
49 These include removal of distortionary tax and subsidy features, legal and regulatory impediments, and
upgrading of institutions, such as registries, etc. (see Annex A of the 1997 Housing Finance Study, World
Bank).
50 See Annex A of the 1997 Housing Finance study for recomnmendations in this area. However, it must be
noted that zoning will only go so far. A developer can buy up a lot of land zoned for the poor, not pay the
land tax, and hold it for speculative reasons in land banks for several years, taking this land out of the
market, so that the cost of land goes up, and the government is forced to convert yet more agricultural land
into residential/connercial land to meet demand.
Filipino Report Card on Pro-Poor Services 95
Chapter V: Housing
approved. Some projects take as long as two years. Six months to one year seems to be
the average waiting time. The CMP's ability to process loans speedily is hampered by
organizational problems and the small number of staff processing and attending to CMP
loans. Addressing these organizational issues will greatly improve the capacity of the
CMP to service more clients.
79. Among all the housing programs, the CMP stands out as the only one where the
participation of NGOs is institutionalized. This has vastly contributed to facilitating loan
processing and making CMP services more accessible to poor families. But since many
poor communities are still unorganized or not reached by NGOs, it may be necessary to
devote funds to awareness campaigns and empowering NGOs in rural areas.
80. Physical Upgrading. To address the problem of a disproportionately smaller
percentage of housing assistance going to poor households, it is important to find a new
approach to providing housing assistance, particularly to the poor, who are marginally
reached by existing programs. An emphasis on physical upgrading over mortgage
assistance might be a more appropriate strategy to reach the large numbers of poor
families. A major source of dissatisfaction among both the rural and urban poor is the
physical environment in which their house is located. Upgrading programs to improve
sanitation and water conditions would go a long way towards improving the health and
overall quality of life of the poor. To the extent that respondents have identified poor
environmental conditions and insecurity from weather problems as major sources of
dissatisfaction also suggests that the improvement of housing facilities can lead to
healthier environments, which in turn are likely to bring about improved health outcomes
for poor families. In other words, improving the housing conditions of the poor also
leads to reduced vulnerabilities. Upgrading may be implemented with or without security
of land tenure. Devising community-based savings programs and simple collection
schemes, which will enable people to carry out housing transactions in their communities
could complement and reinforce an effective community upgrading program.
81. Subsidy. The question of subsidy inevitably arises in this context because of the
need to make the programs affordable. A determination of what costs must be borne by
program beneficiaries and what costs should be shouldered by the public sector is crucial
and should be studied and negotiated.
82. Public spending on housing, which historically has averaged at about 0.5% of the
total national budget, must be increased. This level is far below the housing expenditure
of other middle-income countries. Considering the tight fiscal situation of the Philippines
at present, this might not be easy to do in the short-term. Marshaling non-budgetary
sources of funds may be necessary. Official development assistance (ODA) could be one
such source, although its possible impact on the foreign debt situation must also be
carefully taken into account. The use of government-managed pension funds for housing,
a strategy which the government has been pursuing, may have to continue. But this has
to be accompanied by reforms in the housing finance system that would increase
Filipino Report Card on Pro-Poor Services 96
Chapter V: Housing
efficiency and reduce corruption in the utilization of these funds,51 while encouraging the
entry of private funds into housing. There is a need for further exploration on how
subsidies could be channeled institutionally, with effective monitoring/tracking to
minimize leakages. Interest subsidies on housing loans in the Philippines have been
found to be regressive because they tend to be captured by the non-poor. Other forms of
subsidy (e.g., capital grants or lump-sum subsidies) have been recommended and could
be explored.52
83. While the mechanisms for targeting subsidies remain to be worked out, there is
consensus in the Philippines that housing subsidies for the poor should be a normal
component of a social development policy, similar to subsidized public education and
health care. Modem systems in developing countries (e.g., Latin America and South
Africa) tend to give a one-time capital subsidy to eligible households. The subsidies are
targeted and the poorest get the highest level of subsidy (both in relation to housing and
in real terms). Ideally, there are also incentives for savings.53
84. Rental Housing. Another option that can give the poor housing security at a low
cost is rental housing. Since affordability is a major issue in providing housing tenure,
finding altematives to home ownership may be necessary. Rental housing and
community upgrading without home ownership offer some approaches that can be
explored. Although Report Card findings show that satisfaction with current housing is
closely tied to ownership, there are ways of raising satisfaction levels by improving
housing quality and security of tenure without conferring outright ownership if the latter
is deemed problematic.54 Unfortunately the Philippines lacks the experience in rental
housing from which to derive lessons or reach conclusions on their effectiveness and
affordability. The time has come to experiment with this particular housing approach.55
A separate housing program could be designed for the transient homeless and the
extremely poor (e.g., people who rent folding beds on sidewalks, or sleep in open parks)
in the form of hostels offering bed and toilet facilities. Housing agencies can work with
the Department of Social Welfare and Development to assist this group.
51 According to the 1997 World Bank Housing Finance study, it is imperative to deal with the real markets
(by improving registries, facilitating conversion, increasing infrastructure investment in key areas to bring
down land development multipliers, taxing real estate and penalizing those who take land out of action for
speculative purposes, cutting red tape which generates a lot of bribes for local officials, and rationalizing
tax incentives for developers). This may be difficult but without it, land prices will continue to be
systemically high and the subsidies needed to ensure affordability will be higher.
52 Refer to 1997 Housing Finance Study, Llanto, et.al., 1997 and Llanto, 1996.
53 Tannerfeldt, Goran. 1995. "Towards an Urban World: Urbanization and Development Assistance."
Stockholm: Swedish Intemational Development Cooperation Agency.
54 Homeownership has been traditionally acknowledged as part of every Filipino family's dream. However,
aside from being inefficient, and unachievable for the poor (given low savings rates), 100% ownership is
not essential to achieving 100% adequacy of shelter. The Philippines Constitution calls for adequate
shelter for all, not home ownership for all. Perhaps new options in housing are necessary, like a well-
functioning rental market, which is considered an important component of any efficient housing mnarket.
However, rental markets are severely hampered in the Philippines.
55 Pagtambayayong Foundation, "Renters in Low-Income Communities in Cebu City," SELA VIP
Newsletter, October 1999.
Filipino Report Card on Pro-Poor Services 97
Chapter V: Housing
85. Considering that utilization of housing services outside the NCR is lower, there is
a need to develop housing programs specifically suited to conditions outside the NCR.
On the other hand, since programs like the CMP are gradually losing their applicability to
the NCR as a result of high land costs, there is a need to develop other programs geared
specifically to NCR. This suggests the need for more differentiated programming of
housing packages. For instance, CMP might be more aggressively promoted in non-NCR
urban centers, whereas the community upgrading approach could be pursued in highly
urbanized areas. A differentiated approach becomes even more necessary in designing
rural housing programs.
86. To enhance security of tenure without land ownership, there might be a need to
enact legislation to introduce a variety of tenurial arrangements (e.g., long-term leases,
usufiuct contracts) that grant tenurial rights without land ownership.
87. Relocation. An important source of satisfaction as far as housing is concerned,
particularly for urban dwellers, is access to work, services, and facilities. This finding
suggests that, although dissatisfied with the size of their dwelling, the poor environmental
conditions, and the quality of building materials, the urban poor greatly value the
proximity of their current housing to public services and facilities. In light of this
finding, the government strategy of relocating informal settlers, most of whom are either
poor or middle-income (bottom 60%) households, appears ill-advised.
88. Admittedly, in some cases resettlement will be inevitable. Where possible,
resettlement to near-site, in-city locations should be pursued over distant, out-of-city
relocation because the latter takes away the most valued aspects of the poor's current
housing as revealed in the survey which are proximity to services, public facilities, places
of work and the social capital built up often over decades that helps sustain their survival
and promote their advancement.56 Thus, there is a need to review the heavy emphasis
placed on resettlement as the primary strategy for dealing with illegal or informal
settlements.
89. Although relocation potentially provides security of tenure, there are important
trade-offs involved that make the advantages of secured tenure less attractive to the poor.
Experience with resettlement projects has shown that these aspects, in particular, access
to employment, are not readily restored in the resettlement sites. For one thing, factors
reflecting the urban poor's dissatisfaction, such as the size of the house and the poor
quality of building materials, are not necessarily improved. Many resettlement projects
are poorly implemented, with house size and quality of building materials not
necessarily/significantly better. Further, basic services are not provided promptly,
reliably and in sufficient quantity in the resettlement sites. Thus, this housing approach
56 Almost every decade since the 1950s has seen the regular turn-out of analysis and studies exhorting
government on the failures of distant relocation (e.g., Poethig, 1969; Keyes, 1978; Ruland, 1982; Makil,
1983; Murphy ,1993; Racelis, 1996) due primarily to the absence of basic services, facilities, and resources
in these relocation sites. Such services would enable displaced families to regain what they had lost in the
process of the transfer (in terms of entitlements, social capital, dismantled social network of contacts for
work opportunities) and the emotional "trauma" that accompanies the experience of losing one's home.
Filipino Report Card on Pro-Poor Services 98
Chapter V: Housing
does not seem to result in significant improvements in the well-being of the poor, and
may in fact make them worse off.
90. Instead of distant relocation, a stronger emphasis on in-city relocation, preferably
nearby, or on-site upgrading must be pursued. While this option is normally hampered
by skyrocketing land costs in highly urbanized areas, it is extremely practicable and cost
effective in secondary cities and urban centers still harboring low-density areas. The
National Housing Authority, in cooperation with local governments, could reorient its
land-banking and resettlement programs accordingly.
91. Since the poor are most dissatisfied with house size and building materials, it
would be instructive to ascertain the level of satisfaction of beneficiaries of government
relocation projects. Lot sizes of 30-36 square meters and floor areas of 24-30 square
meters are presently the norm. The houses are typically row houses, with concrete walls
and galvanized iron roofs. Much of the dissatisfaction comes from the substandard
construction.57
92. Experience with past relocation projects has shown that there are many hidden
costs associated with out-of-city relocation. Besides the loss of livelihood and the
inconvenience caused by the limited or missing public services such as water, electricity,
schools, transport and health services, distant relocation also deprives poor households of
the opportunity to earn additional income. Secondary income earners lose the
opportunity to render services to well-to-do clients as, for example, domestic helpers,
laundry women, and repair men. Families that previously rented out rooms or bed spaces
likewise lose the opportunity to earn additional income.
93. As indicated by the survey results, people's level of satisfaction is very much
affected by tenure and ownership. While relocation projects in principle provide security
of tenure, in practice the granting of tenure is hampered by beneficiaries' inability to
comply with the required payments, unclear policies, poor collection systems, and the
presence of free-riding "illegal entrants" who discourage the lawful beneficiaries from
paying their amortization or rent.
94. Improvements in the present relocation projects may be achieved by ensuring the
adequacy of public facilities and services, particularly transport services, and improving
the administration of the projects so that the objective of giving poor families security of
housing tenure is achieved.
95. Mortgage Financing Programs. The government provides loans to individual
borrowers through the Multi-Window Lending program. It is possible that many, if not
the majority, of the respondents in the Report Card survey who said they had applied for
housing assistance referred to this type of assistance. Interest rates are lower, which is
57 The dissatisfaction comes less from these norms than from the final product, which is often unfinished,
lacks piping, has 3/8 instead of 5/8 inch metal rods supporting the concrete structure, lacks windows/doors,
etc., has gaps between the structure and the ceiling that allow rain to enter, or is built on dangerously steep
slopes susceptible to erosion. These properties should not be receiving COCAs (certificates of occupancy)
from authorities evaluating the final products.
Filipino Report Card on Pro-Poor Services 99
Chapter V: Housing
probably the reason why respondents generally found government housing programs
more affordable compared to other sources.
96. Nevertheless, the program tends to cater more to higher-income beneficiaries
because eligibility requirements and liberal lending rules allow the non-poor to access the
housing assistance funds. The problem is structural. Government-sponsored savings
schemes such as the SSS, GSIS, and Pag-Ibig funds are the primary sources of financing
for the Multi-Window Lending Program. The former (i.e., SSS, GSIS and Pag-Ibig) are
required by their charters to cater to their members, the large majority of whom are not
poor. Therefore, in order to reach the poor, the government should either develop other
forms of housing assistance for this particular group (e.g., rental housing) or open a
separate lending window with less stringent eligibility requirements at subsidized interest
rates.
97. Abot-Kaya Pabahay. This program (initiated during the Aquino Administration)
provides interest subsidy to poor families on housing loans during the first five years of
the loan amortization period. Although the program helps reduce the monthly
amortization payments during the first five years, it is not a widely used program for a
number of reasons. First, very few people know of its existence. There is no active
information campaign about this particular program. Second, the income ceiling defining
eligibility for the program is not aligned with the income eligibility requirements of the
lending programs that it is supposed to complement. Therefore, families that would
qualify for Abot-Kaya may not qualify for the main home lending program (e.g., SSS,
GSIS, Pag-Ibig), or those who qualify for the main lending program might have incomes
above the ceiling allowed by Abot-Kaya. There is thus a need to review the program and
explore the possibility of using it to subsidize amortization/interest rates of the CMP and
relocation housing assistance, programs which specifically cater to the poor. This would
ensure better targeting of the Abot-Kaya subsidies.
98. Information Dissemination. It is evident from the Report Card findings that the
lack of information on housing programs, and ways to access these, are major reasons for
non-application to government housing programs. There is thus a need to inforrn and
educate the public, particularly the urban and rural poor, on available housing programs.
Local governments and the mass media can be tapped toward this end. At the moment,
only PAG-IBIG advertises its programs on television and radio, but these programs cater
only to its members. A wider information campaign must be developed to inform the
people on the range of housing services available, while mobilizing local government
workers and the mass media. The use of the vernacular is most important.
99. For providers of housing assistance this implies a need to package varied kinds of
information that are responsive to basic, detailed, and specialized questions and concerns
of clients. This implies disaggregation according to function - whether the need is for
simple information, procedural guidance, or more technical (financial, legal, etc.)
58 This could be done by reallocating most government resources for the housing needs of the poor, in the
forn of targeted subsidies, while the non-poor can avail of loans from cornmercial banks/other non-
govermnent sources and pay the market rate of interest.
Filipino Report Card on Pro-Poor Services 100
Chapter V: Housing
clarifications. Such information is frequently taken for granted but in reality is not
readily available.
100. Improving Quality of Housing Services. In addition to carrying out an
infonnation drive, there is also a need to improve the quality of service delivery. The
responses on satisfaction with government housing services suggest important areas for
enhancing the quality of public housing services. These include the waiting time to
receive assistance, the complex, and time consuming, application procedures, and the
inadequacy of grievance resolution mechanisms. Given these observations, housing
agencies, particularly those implementing lending programs like the CMP and Multi-
Window Lending Programs, would do well to exert more effort in setting predictable
waiting times, streamlining application procedures, and instituting well-understood
grievance resolution mechanisms.
101. Decentralization. Decentralizing housing services delivery is essential in order
to reach the under-served target groups, i.e., rural households and urban poor outside
NCR. The Report Card uncovers a heretofore little known facet of the housing situation,
namely, the great dissatisfaction of the rural poor with their housing. Greater attention
needs to be given to expanding the housing delivery system to cover non-urban areas.
However, the present organizational set-up of the housing bureaucracy, which has tied up
housing with urban development and has generally not extended its presence to rural
areas, is ill-equipped to deal with the rural housing problems. In this regard,
decentralization of housing services and the empowerment of local governments through
effective training and resource mobilization can be key strategies.
102. Local governments must be encouraged and assisted to undertake land banking
and implement lot distribution and community upgrading programs within their areas of
responsibility59 (see Box 3). Although this mandate to local governments is contained in
60
existing laws, particularly the Urban Development and Housing Act, it is rarely put in
practice because of the absence of a clear national housing policy that not only
emphasizes the role of local govemments in the provision of housing but also provides
mechanisms for channeling housing funds to them.
103. The establishment of local housing boards to plan and oversee the implementation
of local housing programs should be supported. There are, at present, pending bills in the
Senate and in the House of Representatives mandating the creation of such bodies. The
existence of local housing boards with representation from NGOs, business and local
communities will facilitate the meaningful participation of different stakeholders in local
policy-making in housing and enable the local government to enlist the support of these
stakeholders for resource mobilization.
59 Perhaps equally important as land banking is to encourage increased usage of land that has already been
taken out of the market due to speculation. A number of LGUs have been practicing land banking as part
of their strategy to develop a residential land delivery program in their respective localities by disposing
these to qualified and registered urban poor beneficiaries as mandated by the Urban Development and
Housing Act (see Dizon, Quijano, Lachica and Leyesa, 2000).
60 Republic Act 7279.
Filipino Report Card on Pro-Poor Services 101
Chapter V: Housing
104. People's Participation. Housing agencies in all regions need to understand the
principles and procedures of people's participation in the planning, implementation and
monitoring of housing solutions. The number of respondents who indicated they
belonged to housing and other associations is extremely low. Since such associations
tend to be the sources of informnation and action with regard to service access, this is
where non-government organizations and people's organizations can come in to enhance
household and community interaction with government or non-government housing
providers. Worldwide long-standing evidence indicates that these participatory processes
result in communities whose residents are more satisfied because they have a stake and a
say in the housing decisions that affect their lives, whether these take the form of on-the-
ground dwellings, multi-story apartments, or resettlement sites. As housing decision-
making devolves to local governments, the interaction between local officials and their
voting constituents is bound to gain new strength in effective governance.
Filipino Report Card on Pro-Poor Services 102
Chapter V: Housing
Box 3: Local Government Housing Initiatives
1. Cebu City - Bridge Financing for CMP and GLAD, and City Acquisition of Private Lands
(Region 7)
As early as 1989, the Cebu City (local) government designed a program to assist urban poor homeowners'
associations to gain access to land mortgage funds through the CMP. This was to prevent termination of
agreements with landowners owing to long waiting periods for processing and release of checks. The city
has put up a PhP17 million fund for acquisition of land with existing sale contracts between owners and
community associations, that have already been filed and are awaiting release of funds under land mortgage
loans. Upon release of the funds from the mortgage loans, the funds are assigned to the City by the
National Home Mortgage Finance Corporation (NHMFC) to be deposited to a special Trust Fund created to
circulate the funds for future projects.
In recent years, separate programs have been created with the establishment of the City Housing
Acquisition of Private Lots (CHAPEL) and the City-Owned Lots Rehabilitation and Disposition (CORE)
Programs, which give urban poor groups the option to purchase the private or city-government land they
occupy. Under the programs, individual members of homeowners' associations can avail of up to
PhP45,000 in financial assistance for land acquisition from the city government, or up to 90 percent of the
appraised value of the land being acquired, whichever is lower. The beneficiaries pay for the private or city
land purchase through direct amortization payments to the city government.
2. Marikina City - In-city Relocation of Informal Settlers (NCR)
In 1993, the city government created the Marikina Settlements Office (MSO), tasked with the
responsibility of developing new cornmunities for the urban poor and upgrading slum and blighted areas in
order to reach its vision of a "Squatter-Free Marikina." The objective of the program is to provide the
urban poor with security of tenure by giving them affordable house-lots on which they can build their
homes. By the end of 1997, on-site upgrading was undertaken in 34 communities in four barangays. In
1998, two new sites were added, increasing the total number of Tesettlement areas to six. Conmmunity
infrastructure in these areas was also improved with the construction of drainage systems, concrete roads
and alleys, and the provision of electricity and water. Infrastructure development was also undertaken in
six major resettlement areas. By 1998, some 13,771 families have been awarded house-lots and a total of
106.7 hectares of land had been acquired for distribution to urban beneficiaries.
3. Naga City - Experiments in Land Acquisition and Tri-partite Strategy (Region 5)
In the late 1980s, through the strong lobbying by the Community Organization of the Philippines Enterprise
(COPE), a local NGO, the Naga City established the Urban Poor Affairs Office (UPAO) under the Office
of the Mayor to lead the implementation of the "Kaantabay sa Kauswagan" project. The project's priority
concerns were to improve the living conditions of informal residents and to minimize, if not avoid, their
eviction as well as the demolition of their shanties. The role of the UPAO was to negotiate and acquire
lands for the beneficiaries whether for on-site or off-site settlements, work out a mutually acceptable
arrangement between property owners and urban poor occupants under land sharing schemes, and facilitate
the exchange of properties (lands) occupied by the urban poor with others of approximately equal value.
The city has coordinated with its NGO partners in identifying CMP projects, determining qualified
beneficiaries, organizing communities, and preparing them to mobilize resources to meet their financial
obligations. This tri-partite (city-NGO-community) organizational strategy helped the city to mninimize
administrative bottlenecks in their operation. The city shouldered the financial requirements of its various
activities in coordination with the national government, but delegated to people's organizations, NGOs and
private business some of the administrative functions vital to the successful implementation of its housing
program.
Sources: Data from the LGU Compliance Monitoring Project (UPA and ICSI); Karaos (2000); "Decentralization, Local
Governance and Urban Poverty in Four Philippines Cities;" Sayos, Quisao and Manasan (1998), "Local Efforts in
Housing Provision."
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER VI: SUBSIDIZED RICE DISTRIBUTION'
1. POVERTY AND FOOD SECURITY
1. Food security is a basic requirement of social harmony, economic growth, and by
extension, political stability. Thus, food security has always been prominent in the
government's agenda. Recognizing its key role, the Government of the Philippines has
announced that it will give priority to this concern.
2. Food security at the household level is also a critical component of poverty
reduction, another priority of the Administration. In the Philippines where rice is the
main staple food, enhancing access to rice, though hardly sufficient to reduce poverty,
will undoubtedly mean much to the poor, especially the food insecure.2 It will
demonstrate that the government is serious about addressing the needs of the poor.
2. NFA's MANDATE
3. The Government of the Philippines has been involved in the rice market to
address the broad food security agenda largely for political stability, rather than
household level food security to reduce poverty. The National Food Authority (NFA)
had been, and is, the government's arm in this regard. The primary mandate of the NFA
is rice supply and price stabilization. The NFA is also charged with assisting rice
farmers, protecting rice consumers, and promoting the development of the rice trading
system. It participates in the market to provide competition and encourage efficiency
where there are private traders, and to fill in market gaps, which private traders cannot
and are not expected to address.
4. The NFA pursues supply and price stabilization in two ways: (i) ensuring that
there is adequate supply of rice with all market participants to meet domestic
requirements at all times; and, (ii) maintaining enough supply of rice in government
hands to correct immediately any market supply gaps that emerge. To ensure that the
supply of rice in the country is adequate to meet domestic requirements, the NFA,
assisted by a government inter-agency committee, monitors stocks held by private traders
and assesses the need for rice imports.3 To make sure that there is enough stock in
government hands, the NFA maintains a rice buffer stock, equivalent to at least 30 days
' This chapter has been prepared by Ching Dela Penia and Carol V. Figueroa-Geron, with inputs from the
Report Card team.
2 The Social Weather Stations has tracked the incidence of hunger among Filipino households over 1988-
2000. The 11 quarterly observations reveal that hunger has been both serious and volatile, with 12.7% of
the households experiencing hunger between November, 2000 - December, 2000. A family is considered
as experiencing hunger if it does not have anything to eat at least once in the last 3 months.
3The NFA holds sole authority to imnport rice, but usually gets clearance from the President. Presidential
clearance is necessary to obtain exemption from import duties.
Filipino Report Card on Pro-Poor Services 104
Chapter VI: Subsidized Rice
of national consumption on July 1 of each year, the start of the rice-lean season that lasts
for three months. The Authority also maintains emergency reserves, equivalent to at least
15 days consumption, throughout the year.
5. The NFA sources its buffer stocks from its domestic procurement of palay4 from
farmers, augmented by imports. The domestic procurement of NFA is meant not only to
fill up its emergency and buffer stock requirements but also to protect palay producers
from low farm-gate prices. The NFA buys palay from producers at support prices that
ensure profitability in palay farming. The procurement operations of NFA are supposed
to provide farmers an alternative buyer, which encourages traders to match or exceed the
NFA support prices.
6. The NFA sells its rice stocks to accredited retailers, who resell this rice to
consumers. The NFA pursues two objectives in selling rice. First, it programs the
direction and timing of rice releases to stabilize supplies and prices in the market.
Second, it sets the prices of the rice releases at levels that ensure that rice prices to
consumers remain affordable. The retail price of NFA rice to consumers is generally set
at about PhP4.00 per kilo lower than the prevailing market price for rice. The retailers
are allowed a margin of PhPl.0O per kilo on the sale of NFA rice to consumers. There is
no quantity limit on the amount of NFA rice that can be bought by a retailer or consumer
as long as the NFA rice stocks allow. Thus, NFA rice is subsidized and available to all.
7. Since NFA rice is subsidized, the Estrada Administration used NFA as one of the
key agencies in implementing its programs to address poverty. NFA rice and other basic
commodities5 are made available in ERAP (Enhanced Retail Access for the Poor) stores
that are expected to provide the poor access to govermment subsidized consumer goods.
The NFA's rice distribution function was also made part of the Estrada Administration's
Lingap Para sa Mahihirap Program, which seeks to provide comprehensive support to
the 100 poorest households in each province and city.6
8. The various mandates of the NFA are conflicting and its many tasks to achieve
the mandates are intertwined. As several studies have noted, the conflicting mandates
and intertwined tasks reduce the NFA's ability to effectively and efficiently achieve its
7
objectives. For example, the NFA is supposed to assist rice farners by buyingpalay at a
"high" support price or above the prevailing market price. To help consumers, it is
expected to sell rice at a "low" release price or below the prevailing market price. The
twin mandates of helping rice farmers on the one hand, and protecting rice consumers on
the other, are conflicting. As a result, NFA operations incur substantial losses.8
4 Palay is the local name for paddy, which is unhusked rice.
5 For example, sugar, cooking oil, milk, coffee, sardines and noodles.
6About 3% of NFA's projected rice sales during the year 2000 was included in the Lingap Program.
7 See, for example, AGILE, 2000, "Strategic Reorganization of the National Food Authority for the New
Millenium;" Balisacan, et. al., 2000. "Approaches to Targeting the Poor;" Clarete, et. al., 1998, "Philippine
Grains Sector Development Program Project."
8 Buying "high" and selling "low," as well as storing rice longer to release at the proper time meant that
NFA had to sell at a substantial loss.
Filipino Report Card on Pro-Poor Services 105
Chapter VI: Subsidized Rice
3. THE SURVEY
9. The national Report Card survey of 1,200 households was undertaken in March -
April 2000 to gather information on rice purchased by Filipino households during the six
months preceding the survey. Questions covered awareness about the rice subsidy
program, quantity of rice consumed, household expenditures on rice, physical access to
stores selling NFA and non-NFA rice, assessments of different characteristics of the two
types of rice, suggestions on effective programs to target subsidized rice to poor
households, and views on possible corruption in implementing proposed targeting
programs. The questionnaire also included a short segment on client awareness, use and
satisfaction with the ERAP stores.
10. The survey results are analyzed by geographic area,9 urban and rural residence,
and by poverty status of households based on household expenditure. Households are
classified into the bottom 30%, middle 30% and top 40% according to their expenditure
level, referred to hereafter as the poor, the middle-income group, and the rich,
respectively.
4. RICE CONSUMPTION
11. The survey confirms the importance of rice as staple food. Some 83% of survey
respondents consumed rice three times a day or more (see Table 1 below), while a
majority of the remainder ate rice twice a day. The proportion eating rice thrice or more
daily is highest in Mindanao, followed by Visayas and Balance Luzon, and lowest in
NCR. The proportion is also significantly higher in rural areas compared to urban areas.
Table 1: Frequency of Daily Rice Consumption
(Percentage of respondents)
Region/Area Thrice + Twice Once Seldom/Never
RP 83 16 1
NCR 68 30 1 1
Balance Luzon 78 21
Visayas 89 11
Mindanao 97 3
Urban 76 22 1
Rural 94 6
12. The survey results show that the daily frequency of rice consumption is related to
poverty but rice remains a prevalent part of the daily fare, even for the non-poor (see
Table 2 below). Classified by expenditure level, 91% of the poor consumed rice three
times or more, while about 80% of the middle-income and rich groups did so.
9Aggregate Republic of the Philippines (RP), National Capital Region (NCR), rest of Luzon (or Balance
Luzon), Visayas, and Mindanao
Filipino Report Card on Pro-Poor Services 106
Chapter VI: Subsidized Rice
Table 2: Frequency of Daily Rice Consumption
(Percentage of respondents)
Poverty Group Thrice + Twice Once Seldom/Never
Poor 91 9 1
Middle-Income 81 18 1
Rich 79 20 1
13. The rice consuned by households is largely bought, even in rural areas (see Table
3 below). Some 84% of the respondents mainly bought rice in the market. Only 13%
produced the rice they consumed. A few mainly sourced rice from relatives or company
(employer) at no cost, or through barter. The proportion of respondents whose main
source of rice is the market was highest in NCR and lowest in Balance Luzon. It is
higher in urban areas than in rural areas. Since most rice farmers are expected to be in
the rural areas, and Balance Luzon is the main rice-producing area of the country, there is
lower reliance on rice bought in the market in these locations.
Table 3: Main Source of Rice Consumed
(Percentage of respondents)
Region/Area Grow Get Free - Get Free - Get with Barter/ Buy in
Self Family Company Subsidy Exchange Market
RP 13 1 1 0 1 84
NCR 1 3 1 95
Balance Luzon 18 2 1 1 2 77
Visayas 8 0 1 1 1 89
Mindanao 14 1 0 85
Urban 4 2 1 1 0 93
Rural 26 1 1 2 71
14. Only 15% of respondents who most frequently bought rice purchased NFA rice,
and the rest most frequently bought non-NFA rice (see Table 4 below). This is consistent
with the NFA participation in the market, which was limited to about 18% in 1999 and to
between 8% and 15% in previous years. Clearly, govenment participation in rice trading
is not meant to displace private trade. Government sells rice only to stabilize supplies
and to encourage lower rice prices. Moreover, government participation in the rice
market has been constrained by budget limitations. In general, government subsidies
have been curtailed because of the need to trim the budget deficit.
Table 4: Type of Rice Bought
(Percentage of respondents)
Poverty Group NFA Non-NFA
RP 15 85
Poor 27 73
Middle-Income 16 84
Rich 6 94
15. Despite the NFA's limited participation in the market, its operations nonetheless
appear to have disproportionately benefited the poor (see Table 4 above). More than one
Filipino Report Card on Pro-Poor Services 107
Chapter VI: Subsidized Rice
in four (27%) poor households bought mainly NFA rice compared to only 6% of the rich
and 16% of the middle-income households.10 Although the participation of NFA in the
rice market is mainly to stabilize supply and prices, some targeting of the subsidized rice
to the poor seems to occur.
16. However, there is only marginal difference between the absolute number of poor
households who enjoyed the rice subsidy and the absolute number of non-poor
households who did so. While 84 of the poor households in the sample availed of NFA
rice, 75 of the non-poor (i.e., middle-income plus rich) households also did so (see Table
5 below). Projecting the sample results to the total number of households in the
Philippines (estimated at 15 million), the survey findings indicate that about 1.2 million
poor and 1.08 million non-poor households accessed NFA rice.
17. Moreover, because the survey indicates that the poor buy less rice per month on
average (39 kilos) compared to middle-income (42 kilos) and rich households (48 kilos),
it may be concluded that the non-poor effectively enjoy a slightly bigger share of the total
rice subsidies. Assuming that each kilogram of NFA rice bought in 1999 includes a
subsidy of about PhP3.70,11 the poor households enjoyed an estimated total of PhP2,103
million in rice subsidies in that year, while the non-poor captured about PhP2,109
million. Thus, slightly more than half the government rice subsidy is accruing to non-
poor households.
Table 5: Estimated Subsidies on NFA Rice
Estimated Total
Number of Number of Mean Quantity of Estimated Subsidies
Sample Households NFA Rice Bought from NFA Rice
Poverty Group Households (thousands) (kdlos per month) (million PhP/year)
Poor 84 1,215 39 2,103
Middle-Income 51 720 42 1,343
Rich 24 360 48 767
5. HOUSEHOLD EXPENDITURE ON RICE
18. The mean monthly household expenditures on rice are consistently lower among
NFA rice buyers compared to non-NFA rice buyers (see Table 6 below). This is true
across different regions, urban and rural location, and expenditure groups. But the share
of rice in monthly household expenditure is slightly higher at 9% for NFA rice buyers
compared to 7% for non-NFA rice buyers. This is explained by the fact that the average
total household expenditures are consistently higher among non-NFA rice buyers than
NFA rice buyers. This seems to support the earlier finding that some unintended
targeting of NFA rice to the poor occurs.
10 It could be that the better off who buy NFA rice do so for domestic helpers and for pets, or are able to
access good quality imported NFA rice when available.
" In 1999, the retail price of well-milled NFA rice was PhP4.15 per kilo less than the average price of
comparable non-NFA rice, while regular-milled NFA rice cost PhP3.25 per kilo less than the average price
of comparable non-NFA rice.
Filipino Report Card on Pro-Poor Services 108
Chapter VI: Subsidized Rice
Table 6: Mean Household Expenditure on Rice and Share in
Total Household Expenditure
Mean Monthly Mean Monthly Share of Rice in
Expenditure on Rice Household Expenditur Household Expenditure
(hP) (hP)(%
Region/Area/Group NFA Non-NFA NFA Non-NFA NFA Non-NFA
RP 642 865 7,444 12,441 9 7
NCR 532 905 13,654 21,836 4 4
Balance Luzon 667 811 8,117 11,206 8 7
Visayas 561 841 4,036 11,453 14 7
Mindanao 679 937 4,889 8,729 14 11
Urban 629 853 9,777 14,464 6 6
Rural 655 888 5,198 8,244 13 11
Poor 593 647 3,429 3,772 17 17
Middle-Income 707 842 7,337 7,501 10 11
Rich 676 999 21,727 20,399 3 5
19. As may be expected, the proportion of total household expenditure spent on rice
by NFA rice buyers is higher among the poor (17%) as compared to the rich (3%) and
middle-income (10%) households. It is also relatively higher in Visayas (14%) and
Mindanao (14%) as compared to NCR (4%) and Balance Luzon (8%), and in rural areas
(13%) as compared to urban areas (6%). Since the share of expenditure on NFA rice in
total household expenditure is high among the poor, and in regions and locations where
poverty incidence is most severe, it appears that the size of the rice subsidy at the
household level is not large enough to make a significant dent in the poverty status of the
households. 12
20. Indeed, only 35% of NFA rice buyers indicate that the price of NFA rice is cheap,
while 23% think it is expensive (see Table 7 below). The proportion of respondents that
consider NFA rice to be expensive is relatively high in Mindanao (30%) compared to
Balance Luzon (22%), Visayas (20%) and NCR (12%). It is higher in rural areas (27%)
compared to urban areas (18%) and among the poor (24%) and rich (25%) as compared
to the middle-income (20%) households.
12 At an average subsidy of PhP3.70 per kilogram, poor households who purchase on average about 39
kilos of NFA rice a month (or 468 kilos a year) in effect get a total rice subsidy of only PhPl,731
(approximately $35 equivalent) a year. This is about 4% of the (mean) total household expenditure of the
poor (amounting to about PhP41,000 pesos per year or PhP3,429 per month). It would be significantly
lower (less than 3%), if we consider the official poverty line, which was equivalent to a monthly household
expenditure of PhP5,000 in 1997 (the last year for which the estimate is available).
Filipino Report Card on Pro-Poor Services 109
Chapter VI: Subsidized Rice
Table 7: Rating of Price of NFA Rice
(Percentage of respondents)
RegionlArea/Group Cheap Moderate Expensive
RP 35 42 23
NCR 35 53 12
Balance Luzon 33 45 22
Visayas 45 35 20
Mindanao 35 35 30
Urban 32 50 18
Rural 38 35 27
Poor 31 45 24
Middle-Income 41 39 20
Rich 38 38 25
6. AWARENESS AND ACCESS
21. About 95% of the respondents were aware that the NFA sold subsidized rice (see
Table 8 below). Awareness of subsidized rice was slightly lower in NCR and Mindanao
compared to Balance Luzon and Visayas. This indicates that the physical outreach of
NFA is relatively less extensive, which is the case in Mindanao, or its share of the rice
market is lower, which is the case in NCR.
Table 8: Awareness that NFA Sells Subsidized Rice
Region Percentage of Respondents
RP 95
NCR 92
Balance Luzon 96
Visayas 99
Mindanao 93
22. The non-availability of NFA rice appears to push some buyers to patronize non-
NFA rice.'3 About 16% of respondents who largely bought non-NFA rice did so because
NFA rice was unavailable. The proportion is highest in Mindanao (24%), again
indicating that NFA rice is less accessible there.
23. The stores where households most frequently bought rice were usually near the
buyer's residence (see Table 9 below) -- less than a 15-minute walk from home for 49%
of those who bought NFA rice and for 54% of those who bought non-NFA rice.14 But a
'3 The survey shows that supply dependability affects the type of rice households buy. The most important
reason cited by 11% of respondents for buying NFA rice is that supply is dependable, while 12% bought
non-NFA rice for the same reason. Supply dependability emerges as the second most important reason
why households buy a certain type of rice.
14 The survey further shows that convenience of location is also an important consideration in purchasing
rice. The most important reason why 5% of respondents bought either NFA rice or non-NFA rice is
convenience of location. Location of stores selling rice emerges as the third most important reason (after
quality and price) why consumers buy a certain type of rice.
Filipino Report Card on Pro-Poor Services 110
Chapter VI: Subsidized Rice
good proportion also bought rice from quite distant outlets. The rice source is more than
an hour's walk away for 23% of NFA rice buyers and 19% for non-NFA rice buyers.
Table 9: Physical Access to Stores Where Households Most Frequently Bought Rice
(Percentage of respondents)
Less than 15 minutes walk More than one hour walk
Region/Area NFA Non-NFA NFA Non-NFA
RP 49 54 23 19
NCR 7 1 66 6 9
Balance Luzon 47 62 16 13
Visayas 60 50 25 20
Mindanao 38 39 46 33
Urban 68 66 6 8
Rural 31 30 40 41
24. Retail rice outlets appear to be physically less accessible in Mindanao, where
stores are more than an hour's walk away for 46% of NFA rice buyers and 33% of non-
NFA rice buyers (see Table 9 above). Physical access appears to better in Visayas, much
better in Balance Luzon, and best in NCR. Physical access also appears to be much
better in urban areas than in rural areas.
7. FACTORS INFLUENCING RICE PURCHASES
25. Price and quality are the major determinants of choice of rice purched. Some
70% bought NFA rice because of lower price and an equal proportion (70%) bought non-
NFA rice because of better quality.'5
26. Since the NFA is engaged in emergency and buffer stocking to iron out seasonal
and/or localized supply shortages, it generally stores rice longer than the average rice
trader. Storage, if not adequately configured, could take a huge toll on the quality of rice.
Moreover, unlike private traders who can finely discriminate prices based on rice quality
differences, the NFA generally maintains only two release prices within a very narrow
range: one for regular milled rice and one for well milled rice, the latter PhPl.00 per kilo
higher than for regular milled rice.16 The quality of NFA rice stocks is highly variable,
since they come from different sources, both from local procurement and imports. A
retailer may occasionally get good quality rice from the NFA, if no other stock is
available. Normally, the NFA mixes fast moving good quality rice with slow-moving
poor quality rice for most of its releases.17 Any good quality rice that the NFA releases
may also be switched and sold as non-NFA rice or mixed with bad quality rice by
retailers.
'5 About 70% of the respondents who bought NFA rice cited "price" as the most important reason for
buying it. In contrast, 70% of the respondents who bought non-NFA rice cited "quality" as the most
important reason for buying it.
16 In 1999, the NFA adopted a release price for imported special rice that is PhP1.00 per kilo higher than
the price for its locally-procured well-milled rice. NFA's release prices in 1999 were PhP 14.00 per kilo for
regular milled rice, PhP 15.00 for well mnilled rice, and PhP 16.00 for imported special rice
'7 Clarete, et. al., 1998, "Philippine Grains Sector Development Program Project."
Filipino Report Card on Pro-Poor Services 111
Chapter VI: Subsidized Rice
27. The survey highlights that the quality of NFA rice is generally inferior to non-
NFA rice (see Table 10 below). Some 31% of NFA rice buyers rated NFA rice as low in
quality. In particular, smell,' taste and color are the attributes that are most frequently
described as poor for NFA rice. In comparison, very few non-NFA rice buyers rated
non-NFA rice as low quality and/or lacking in the other quality attributes.
Table 10: Rating of Rice
(Percentage of respondents)
Low in Quality Poor in Taste Poor in Color Poor in Smell
Region/Area/Group Non- Non- Non- Non-
NFA NFA NFA NFA NFA NFA NFA NFA
RP 31 3 24 1 22 0 40 4
NCR 24 2 12 1 35 0 29 3
Balance Luzon 28 2 25 1 14 1 35 3
Visayas 40 1 15 0 35 0 30 2
Mindanao 38 6 32 1 27 0 62 9
Urban 29 2 18 0 23 0 35 2
Rural 33 5 30 2 21 1 46 8
Poor 36 5 27 1 26 1 48 6
Middle-Income 29 1 22 0 18 0 31 5
Rich 21 3 17 1 17 0 33 3
28. Poor ratings for quality, smell and taste of NFA rice are more prevalent in
Mindanao compared to other regions. Poor ratings for quality, taste, color and smell of
NFA rice are more prevalenit among the poor compared to middle-income and rich
households. Those in rural areas more frequently rated quality, taste and smell of NFA
rice as poor compared to urban residents, even though urban households more frequently
described NFA rice as poor in color. Thus, the poor, rural residents and the people of
Mindanao have to tradeoff some important quality attributes for the cheaper NFA rice.
8. TARGETING RICE SUBSIDIES To THE POOR
29. There is majority support for targeting rice subsidies to the poor19 (see Table 11
below). Some 56% of the respondents believe that poor people should pay a lower price
for NFA rice. This belief is prevalent across regions, in urban and rural areas, and across
expenditure groups.
18 The sack-like odor, often associated with NFA rice, can be attributed to the fact that NFA's buffer stock
is sometimes stored for longer periods than is ideal.
19 While there is broad support for targeting rice subsidies to the poor, this does not automatically imply
that there is broad support for NFA and its operations.
Filipino Report Card on Pro-Poor Services 112
Chapter VI: Subsidized Rice
Table 11: Client Views on Targeting Subsidized Rice to the Poor
(Percentage of respondents)
Region/AreaJGroup Agree that Poor People Should Pay Lower for NFA Rice
RP 56
NCR 51
Balance Luzon 55
Visayas 61
Mindanao 55
Urban 52
Rural 61
Poor 57
Middle-Income 57
Rich 53
30. Situating retail outlets in poor areas appears to be the most preferred mode for
targeting. Thus, about 54% of the respondents believe that the most effective program
for targeting subsidized rice to the poor is through special stores selling NFA rice in poor
barangays. Again, there is not much difference on this assessment across regions,
between urban and rural areas, and across expenditure groups (see Table 12 below).
Table 12: Client Views on Special Stores to Target Subsidized Rice to Poor
(Percentage of respondents)
Region/Area/Group Special Stores in Poor Barangays
RP 54
NCR 59
Balance Luzon 59
Visayas 48
Mindanao 47
Urban 54
Rural 52
Poor 53
Middle-Income 48
Rich 58
31. A smaller proportion of the respondents (36%) think that giving poor people
identification (ID) cards would be effective for targeting subsidized rice to the poor (see
Table 13 below). An equal proportion indicated that it would be implemented with no
corruption. About 16% of the respondents think that giving poor people ID cards to
obtain subsidized rice would be implemented with much corruption, while 48% think it
would be implemented with some corruption. Indeed, corruption would presumably
occur in the identification of people entitled to ID cards, in the distribution of ID cards,
and even in the sale of the subsidized rice to ID card holders. Moreover, the
administrative costs of identifying poor households eligible to the ID card and the
controls and monitoring required to stem and prevent corruption would substantially
lower the cost effectiveness of this mode of targeting.
Filipino Report Card on Pro-Poor Services 113
Chapter VI: Subsidized Rice
Table 13: Client Views on Giving Poor People ID Cards to Target Subsidized Rice
(Percentage of respondents)
Region/Area/Group Giving Poor People ID Cards
RP 36
NCR 28
Balance Luzon 32
Visayas 41
Mindanao 43
Urban 35
Rural 38
Poor 36
Middle-Income 42
Rich 32
32. There is much less support (only 10%) in giving food stamps to poor people to
buy subsidized rice (see Table 14 below). The reservations appear to be essentially on
the implied limits on the quantity of rice that could be bought, as embodied in the stamps.
Moreover, such mode of subsidizing entails more cumbersome and costly administration,
especially if the distribution of the stamps would be done recurrently.
Table 14: Client Views on Food Stamps to Target Subsidized Rice to Poor
(Percentage of respondents)
Region/Area/Group Giving Poor People Food Stamps
RP 10
NCR 13
Balance Luzon 9
Visayas 11
Mindanao 10
Urban 11
Rural 9
Poor 11
Middle-Income 10
Rich 10
9. ERAP (ENHANCED RETAIL ACCESS FOR POOR) STORES
33. Unlike the regular NFA rice release operations, ERAP outlets20 are supposed to
be located where the poor are, as ERAP stores are intended to provide the poor better
access to basic commodities at subsidized prices. It is thus not surprising that awareness
of ERAP stores is lower, overall, compared to awareness of NFA rice, which is
accessible to all (see Table 15 below). In the aggregate, some 21% of respondents were
not aware of sari-sari stores, 37% were unaware of rolling stores or tinda vans, and 43%
were not aware of Palengke Ng Bayan outlets. It is very striking that lack of awareness
of ERAP stores is consistently, for all outlet types, highest among the poor and lowest
among the rich. Similarly, awareness is quite high in NCR (economically better-off
20 There are three kinds of ERAP outlets: Palengke ng Bayan outlets or accredited stalls in public markets,
Sari-Sari stores or accredited neighborhood convenience stores, and rolling stores which are tinda vans
(mobile stores) operated by the NFA to sell in designated public places.
Filipino Report Card on Pro-Poor Services 114
Chapter VI: Subsidized Rice
region), and extremely low in Mindanao (economically poorest region), especially for
rolling stores and Palengke ng Bayan outlets.
Table 15: Non-Awareness of ERAP Stores
(Percentage of respondents)
Region/Area/Group Sari-Sari Stores Rolling Stores/ Tinda Vans Palengke ng Bayan
RP 21 37 43
NCR 8 5 14
Balance Luzon 20 27 33
Visayas 20 44 49
Mindanao 32 71 75
Urban 16 26 33
Rural 28 54 59
Poor 33 57 60
Middle-Income 20 34 42
Rich 13 25 32
34. Some 41% of respondents buy basic commodities, including but not limited to
NFA rice, at subsidized prices from sari- sari stores, 26% from tinda vans and 20% from
Palengke ng Bayan (see Table 16 below). Mindanao has particularly high patronage,
55% for sari-sari stores, notwithstanding that awareness is lowest and number of stores
least in the region.21 This indicates that demand for lower-priced products is strong there,
perhaps a reflection of higher poverty incidence in Mindanao. To this end, more ERAP
outlets should be located in Mindanao. In contrast, Balance Luzon has the lowest
patronage of all types of ERAP stores, despite high awareness and largest number of
stores.
Table 16: Use of ERAP Stores
(Percentage of respondents)
Region/Area/Group Sari-Sari Stores Rolling Stores/Tinda Vans Palengke ng Bayan
RP 41 26 20
NCR 49 50 35
Balance Luzon 26 17 13
Visayas 49 35 28
Mindanao 55 19 17
Urban 40 31 25
Rural 41 18 14
Poor 38 18 15
Middle-Income 39 27 19
Rich 44 31 25
35. It is cause for concern that use of the three ERAP outlets, especially rolling stores
and Palengke ng Bayan, is consistently highest among the rich and lowest among the
poor (see Table 16 above). Use of ERAP sari-sari stores is about the same in urban and
rural areas, but use of tinda vans and Palengke ng Bayan is more prevalent in urban
areas. Thus, the ERAP stores program seemed to have resulted in perverse outcomes,
21 Secondary data reveal that Mindanao has the least number of ERAP outlets and Balance Luzon has the
highest number. For example, there were 1,165 Sari-Sari stores and 335 Palengke ng Bayan outlets in
Mindanao, at the end of 1999 and 2000, respectively. In contrast, there were 3,431 Sari-Sari stores and 637
Palengke ng Bayan outlets in Balance Luzon.
Filipino Report Card on Pro-Poor Services 115
Chapter VI: Subsidized Rice
with a better access in urban areas (which already enjoy good access to basic
commodities) than rural areas, and a larger proportion of the non-poor patronizing them
as compared the poor.
10. KEY FINDINGS AND RECOMMENDATIONS
36. Client awareness that NFA sells subsidized rice is high. Yet, only 15% of
respondents bought NFA rice and the rest patronized non-NFA rice. Price is the major
reason for buying NFA rice, while quality is the major consideration for buying non-NFA
rice. Indeed, a fair proportion of NFA rice buyers describe it as low in quality and poor
in taste, smell and color. Clearly, NFA rice buyers have to trade-off quality for cheaper
price.
37. Despite the NFA's limited participation in the market, it nonetheless appears to
have reached the poor more, with some 27% of the poor buying NFA rice compared to
16% of the middle-income and 6% of the rich households. Targeting of the poor
apparently occurs because the poor quality of NFA rice does not attract the more affluent.
The better-off can afford to put a premium on quality in purchasing decisions, while the
subsidized price attracts the poor whose buying decisions put much weight on
price/affordability.
38. The low quality of NFA rice, which resulted in some targeting to the poor, is not
intentional on NFA's part. Low quality results because the NFA stores the rice longer
than the average rice trader. Also, the quality of NFA rice stocks is not consistent, as
these come from various sources. Moreover, the NFA's limitations on release prices
encourage mixing good quality stocks with poor quality stocks to hasten the disposal of
the poor quality stocks.
39. Mindanao appears especially disadvantaged in relation to NFA rice. Of the four
regions, Mindanao has the highest proportion of households without access to NFA rice
-- 24% of respondents in the region bought non-NFA rice because NFA rice was
unavailable. To compound the problem, physical access to the outlets, especially for
NFA rice buyers, appears to be more difficult in Mindanao compared to other regions.
The disadvantage is apparent even on ERAP stores, which are supposed to be located in
areas where the poor live. The region has the least number and lowest awareness of
ERAP stores.
40. A higher proportion of NFA customers in Mindanao describe the rice as poor in
quality, taste and smell, compared to the rest of the Philippines. Client satisfaction with
quality of rice is especially low in Mindanao and lowest among all regions. Mindanao
lags behind Luzon and Visayas in most socio-economic indicators. A major reason given
for Mindanao's pronounced under-development is inadequate physical and social
22
infrastructure, which deserves considerable improvement. This appears to hamper
22 For example, on average, there is only 34.54 meters of paved road per square kilometer of land in
Mindanao, which is well below the national average. In addition the maintenance of existing road
infrastructure has not been a priority in road development programs in Mindanao, leading to its rapid
Filipino Report Card on Pro-Poor Services 116
Chapter VI: Subsidized Rice
customers' access to NFA rice in Mindanao. NFA should look more closely at its
Mindanao operations, with special focus on making rice more available, accessible and
affordable.23
41. Because the NFA rice release operations are geared towards price and supply
stabilization rather than poverty eradication, the non-poor also have access to the
subsidized rice. Some 6% of rich and 16% of middle-income respondents availed of
NFA rice. The non-poor effectively enjoy a slightly bigger share of total subsidies
granted through the sale of NFA rice, since the rich and middle-income households, taken
together, outnumber the poor households, and since the rich and the middle class buy
more rice each month than the poor. Their access to the rice subsidy can only be assessed
as a misallocation of limited resources of a government concerned both with trimming
the budget deficit and improving services for the poor. Indeed, previous studies have
noted that a general food price subsidy is costly and does little for poverty reduction, with
24
a higher proportion of benefits going to the non-poor. To this end, the government
should consider targeting subsidized rice to the poor, rather than providing a general rice
subsidy.
42. Targeting rice subsidies has been on the government agenda for the past few
years. The Report Card results indicate broad support for targeting rice subsidies to the
poor. They also point out that the amount of subsidies currently provided through NFA
rice is not enough to make a significant difference for the poor, considering both costs
(e.g., poor quality and uncertain supply/availability) and benefits (cheaper price).
Despite access to cheaper NFA stocks, expenditure on rice absorbs 17% of total
household expenditure of the poor. Some 24% of the poor buying NFA rice rate the price
of NFA rice to be expensive.
43. Situating NFA rice outlets in poor areas appears to be the most preferred mode for
targeting.25 The Report Card survey results on ERAP stores, which were supposedly
location targeted, are however not encouraging. Awareness and use of these outlets are
higher among the rich and lowest among the poor. Clearly, the unqualified access to
ERAP stores is an issue, especially since the basic commodities sold in ERAP outlets are
subsidized by the government. As a first step, more ERAP stores should be located in
poorer areas, especially in Mindanao, to enable disadvantaged residents to avail of the
low-priced basic commodities offered.
deterioration. The low road density in Mindanao, particularly the paved type, and its poor maintenance,
have a negative impact on the marketing of agricultural and other commodities including basic necessities
and other consumer goods. See Draft Mindanao Sustained Peace and Development Framework Plan,
National Economic and Development Authority, 2000.
23 Because of NFA's present policy of prescribing a uniform mark-up (PhPL.00 per kilo across all areas),
retailers that sell in far-flung areas and incur higher transportation costs end up with a lower net profit.
This situation discourages retailers from selling in far-flung and infrastructure-deficient areas. It may be
worthwhile for NFA to consider adjusting mnark-ups (perhaps through a transportation subsidy) to ensure
that these areas are covered by NFA rice.
24 See, for example, Balisacan, 1994, "Targeting Subsidies to the Poor: The Case of Food Subsidies."
25 This recommendation is also supported by the Philippines Poverty Assessment, The World Bank, 2000.
Filipino Report Card on Pro-Poor Services 117
Chapter VI: Subsidized Rice
11. TARGETED LOW-PRICED RICE DISTRIBUTION PILOT PROGRAM
44. The Report Card survey results confirm the desirability of targeting NFA rice
subsidies to the poor. The challenge is how to accomplish this in the most cost-effective
manner. The survey findings show that self-targeting, or configuring the subsidy such
that the non-poor elect not to avail, could work. This conclusion is supported by the
greater availment by the poor of NFA rice, which is lower in quality. But subsidizing
mainly low quality goods may be unacceptable public policy for some, as it may appear
to imply that it is alright for the poor to have access only to low quality goods.
Moreover, doing so may have negative effects on people's perception of government
resolve to help the poor. Nonetheless, as pointed out by Balisacan,26 low quality rice
need not necessarily be inferior on other counts, such as nutritional value. Balisacan
further points out that a number of countries have successfully implemented such a
scheme of self-targeting food subsidies, for example, sorghum flour in Bangladesh; dark
and coarse wheat flour in Egypt; coarse wheat flour in Morocco; and yellow maize in
Mozambique.
45. Among the various options for targeting subsidized rice to the poor, the
respondents preferred geographic targeting. The NFA recently launched a pilot program
to test the implementation of a targeted low-priced rice distribution program (see Box 1
below). The scheme basically uses geographic targeting but further limits the target
beneficiaries and the quantity of rice they could buy through the use of passbooks. It is
likely that a combination of geographic targeting with issuance of passbooks (a form of
ID cards) may reduce leakages significantly, as compared to either program alone.
Geographic targeting would focus on areas with concentrations of poor (or where the
non-poor are likely to be a minority), thereby reducing leakages to the non-poor.
Issuance of ID cards to the targeted poor in these areas is less likely to be subject to
inclusion of the non-poor, as the majority poor are likely to be more vigilant and may
have the political clout to enforce stricter targeting. Also, the hesitation on the part of a
poor household to accept an ID card due to the perception of a stigma attached to being
labeled as "poor" is likely to be less, as a large majority of their neighbors will also be
issued the passbooks.
26 Balisacan, et. al., 2000, "Approaches to Targeting the Poor."
Filipino Report Card on Pro-Poor Services 118
Chapter VI: Subsidized Rice
Box 1: NFA's Targeted Low-Priced Rice Distribution Pilot Program
Objectve: Ensure the availability and accessibility of low-priced and good quality NFA rice to families below the food
threshold.
Program Beneficiaries: Families below the food threshold to be chosen from poorest barangays in the 5h and 61h class
municipalities in provinces listed under the Comprehensive Integrated Delivery of Social Services (CIDSS) Program of
the Department of Social Welfare and Development (DSWD) and from relocation areas, fishing villages and depressed
areas in Metro Manila, Metro Cebu and Metro Davao. Selection of family beneficiaries shall be done jointly by the
NFA, the DSWD and the Local Government Units (LGUs).
Rice Outlets: Existing ERAP and NFA outlets in targeted areas; in the absence of such, DSWD and LGUs may
recommend the designation of an outlet.
Entitlement: Each beneficiary family shall be entitled to a rice allocation of 2 kilograms (kg) per person, per week of
regular milled rice, 25% brokens, at the price of PhP 14.00 per kg.
Controls: Each beneficiary family can purchase at any one time a maximum of 14 kg or its allocation for one week;
unavailed allocations are forfeited after one week; beneficiary famnilies each have a passbook, issued and pre-numbered
by the NFA Central Office, on which all purchases are recorded; outlets have ledgers, with control numbers from the
concemed NFA provincial office, on which all purchases by beneficiary families are recorded.
46. A key Report Card survey finding is that the amount of subsidy on NFA rice is
modest. However, the price at which rice is offered under the NFA's Targeted Low-
Priced Rice Distribution Pilot Program is not different from the price at and subsidies
with which NFA rice is currently being sold in its regular outlets. Presumably, the NFA
will adjust its regular prices and reduce subsidies for the generally accessible stocks, with
the full implementation of the targeted program. The savings expected from adjusting
prices for the generally accessible rice should be redirected to increasing coverage and
subsidies to the poor. 27 It is recommended that the pilot program should offer a higher
subsidy to make it different from the generally accessible program and thus improve its
impact on the poor beneficiaries.
47. The pilot program limits the entitlement of subsidized rice allocation per person
per week. However, the respondents in the Report Card survey were least supportive of
food stamps, presumably due to the implied limits on the quantity of rice that can be
bought by a family. To this end, the government may wish to review the entitlement
level, following the pilot phase.
48. In relation to the targeted program, the NFA should take steps to substantially
differentiate prices between different qualities of rice sold to eliminate the need for
mixing stocks of varying quality and to improve the consistency between quality and
price charged. It is noted that the stocks to be offered under the targeted program is
ordinary rice, 25% brokens. There should be further minimum specifications with
respect to other important characteristics, such as milling quality, smell and color of the
rice, so that the clients are assured of reasonable quality. This would in part address the
survey findings concerning the higher dissatisfaction of the poor with the quality, smell,
taste and color of NFA rice.
27 To this end, a more in-depth review of the subsidy level is proposed after the completion of the pilot
program. It is recognized that this review will have to be comprehensive, and undertaken in the broader
context of the overall government subsidies to, and resources for, the poor.
Filipino Report Card on Pro-Poor Services 119
Chapter VI: Subsidized Rice
49. Finally, LGUs should probably be given a bigger responsibility for this program.
LGUs should have primary responsibility for targeting areas/sites; screening, selecting
and enlisting beneficiaries; and monitoring implementation. The LGUs are not only
better positioned to perform these tasks, but they also have more direct responsibility for
and accountability to their poor constituents. 28 At the same time, the LGUs should be
asked to contribute to the cost, so that they share in the concern for cost-efficiency.
Moreover, non-government organizations and people's organizations should also be
asked to share in the monitoring of program implementation.
28 The Report Card Findings reveal that the closer the level of government to the public, the more likely it
is that the constituents, especially the poor, know their representatives and the less the perception of (and
scope for) corruption in delivery of government programs at the grassroots. See Chapter VII on the Lingap
Para sa Mahihirap Program.
29 NGOs and POs have experience in undertaking independent monitoring of public service delivery. This
type of civil society monitoring could significantly increase the credibility of the review process.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER VII: LINGAP PARA SA MAHIHIRAP PROGRAM
(Caring for the Poor Program)I
"As a result of the Lingap Program, a new class of poor is emerging --
the political poor -- who are chosen by the political establishment."
Feedback from Stakeholder Workshop on Filipino Report Card, May 2000
1. POVERTY ALLEVIATION FUNDS2
1. Poverty reduction has been recognized by all post-Marcos Administrations as a
moral obligation, social concern, national security imperative, economic necessity, and
political priority in the Philippines. Over the past fifteen years, a number of pro-poor
programs with either an exclusive focus, or with special components, on poverty
reduction have been implemented by the governiment. The first serious, comprehensive
and targeted government effort on poverty reduction in the post-Marcos era began with
the approval of the Poverty Alleviation Fund (PAF- 1) for PhP4 billion in 1996.3
2. The Fund was intended to support poverty reduction programs in the poorer fifth-
and sixth-class municipalities in 20 priority provinces4 and Mindanao, with particular
focus on the Autonomous Region of Muslim Mindanao (ARMM).5 The Fund (PAF-1)
provided support for livelihoods,6 family health and nutrition, and educational
assistance.'
3. While PAF- I was a good start, poverty incidence was only one of several factors
that guided the allocation of funds, and, as a result, some of the poorer regions received
lower than expected allocations. The activities implemented often reflected the concerns
and priorities of the National Government Agencies (NGAs) and the goods and services
delivered by the Agencies did not seem to have matched the felt-needs and priorities of
' This chapter has been prepared by Musunuru Rao and Joven Balbosa, with inputs from the Report Card
team.
2 The presentation in this section draws heavily on the paper by Balisacan, et. al., Approaches to Targeting
the Poor, Final Report to NEDA in Support of the lfNDP-Assisted Project on Strengthening Institutional
Mechanisms for Convergence of Poverty Alleviation Efforts, Manila, March 10, 2000.
3 It could be argued that the creation of the Tulong sa Tao Program in 1987 was the first serious
government effort on poverty alleviation in the post-Marcos era. Although the program was targeted to
low-income groups, inclusion/exclusion criteria were not enumerated, and therefore, there was no effort to
screen prospective beneficiaries.
4Identified based on poverty incidence determnined using income/expenditure levels and social indicators.
5 The relationship between the economic level of municipalities/provinces and poverty incidence is at best
tenuous. See Philippines Poverty Assessment, The World Bank, 2000.
6 For example, direct assistance to farmers, rehabilitation of irrigation systems and assistance to
undocumented overseas contract workers.
7 In the form of scholarships, hiring of teachers and purchase of school equipment such as desks.
Filipino Report Card on Pro Poor Services 121
Chapter VII: Lingap Para sa Mahihirap Program
the target clientele.8 Delays in preparation and issuance of Fund Guidelines and release
of funds resulted in the deferral of program implementation by one cycle in some cases.9
Disbursements from the Fund were slow. There was no systematic monitoring of
whether, or to what extent, the goods and services financed by the Fund reached the
targeted poor, or an evaluation of their impacts.
4. A second Poverty Alleviation Fund (PAF-2) for PhP2 billion was approved in
1997. Like PAF-1, PAF-2 promoted an area-based (geographic targeting) approach for
pulling together all the poverty alleviation efforts to meet the six most basic minimum
needs (MBNs) of the people.10 The six basic minimum needs identified were housing
and resettlement, water and sanitation, health and nutrition, basic education, childcare
and livelihood opportunities.
5. Unlike PAF-1, which covered only 20 priority provinces, PAF-2 funds were
distributed to all fifth- and sixth-class municipalities all over the country and cities, other
than Manila. The funds allocation was based on the number of fifth and sixth-class
municipalities per province.'1 As in PAF-1, poverty incidence was a consideration in the
allocation of funds under PAF-2. However, the actual allocation among provinces did
not seem to have reflected the poverty focus.
6. Municipal Technical Working Groups (MTWGs) were organized in each
recipient municipality to vet and approve projects. However, political interference from
the mayors of the municipalities often overrode the decisions of the MTWGs. Also, civil
society participation, in the form of representation from basic sectors in the decision-
making processes, and in implementation and monitoring of projects, was missing as the
basic sectors were not fully organized and prepared to take on the roles visualized in
PAF-2. The Fund lacked a formal monitoring system, and, consequently, like PAF-1,
assessment of the extent to which the goods and services under PAF-2 reached the target
poor, and their impact, is lacking.
7. A third Poverty Alleviation Fund (PAF-3) was approved in 1998 for PhP2.5
billion. It was intended to ameliorate the adverse impacts of the El Nino and La Ninia
s For example, the scholarship assistance was biased towards higher education and to medicine and post-
graduate courses in science, education and engineering, which may have included few students from poor
families.
9 For example, one school-year for the Departmnent of Education, Culture and Sports and one crop-season to
one year for the Department of Agriculture.
'° The MBN approach utilizes some 33 socioeconomic indicators focussing on three major areas of famnily
wellbeing: (i) survival, (ii) security, and (iii) enabling services. The survival indicators include food and
nutrition, health, water and sanitation and clothing; the security indicators cover shelter (housing), peace
and order/public safety, income and employment; and the enabling services encompass such areas as basic
education and literacy, people's participation in community development and political processes (e.g.,
voting in elections), and family care/psychological needs (e.g., child labor, domestic violence and child
care).
" l Poverty incidence in fifth- and sixth-class municipalities would have been a more appropriate choice for
funds allocation. However, this was not feasible due to lack of data on poverty incidence at the
municipality level. In fact, municipalities do not seem to update even such basic statistics as population
within the municipality.
Filipino Report Card on Pro Poor Services 122
Chapter VIl: Lingap Para sa Mahihirap Program
weather phenomena as well as the Asian Financial Crisis. The focus of the Fund was on
helping farmers and fisherfolk affected by the weather phenomena, indigenous peoples
and the urban poor. Release of monies from the Fund was delayed significantly and its
implementation was hamstrung by cash-flow problems (brought about by the Financial
Crisis). Some of the administrative requirements for indigenous people's groups to be
eligible to receive assistance proved to be too stringent.'2 The urban poor component
comprising socialized housing encountered delays in land acquisition by the National
Housing Authority. As a result, overall implementation of the Fund seemed to have been
delayed by as much as a year or more. Again, there was no systematic assessment of the
extent to which the goods and services provided by the Fund reached the target clientele
and their impact.
2. LINGAPPARA SA MAHIHIRAP 3 PROGRAM
8. The poverty reduction approach of the Estrada Administration (under the Lingap
Para sa Mahihirap Program) should be reviewed in the context of the previous efforts
described above. The approach was to help the poorest of the poor first, by bringing
down the number of poor households from 31.8% in 1997 to about 20% by 2004.14 This
means a reduction of about 12 percentage points during the normal six-year term of the
Administration, or an average of 2 percentage points per year.'5 In absolute terms, the
Program aims to reduce the number of poor families from 4.8 million in 1997 to 3.4
million by 2004; or the number of poor Filipinos from 24 million in 1997 to 17 million
by 2004. In other words, the Program aims to help each year, on average, about two
million poor Filipinos (or about 400,000 families) to graduate out of poverty.
9. The Lingap Para sa Mahihirap was launched as the flagship Program of the
Estrada Administration to reduce poverty. Initially, about 16,100 poorest families (100
poorest families in each of the 78 Provinces and 83 cities16) were identified by the Local
Government Units (LGUs), using the MBN approach. Government help under the
Program is to be channeled to the poor families in the form of a package of assistance on
(i) food, nutrition and medical assistance, (ii) price support for rice and corn,
(iii) protective services for children and youth, (iv) rural waterworks, (v) socialized
housing, and (vi) livelihood development.'7
12 For example, registration with concerned govermnent agencies, comprehensive consultations with the
community on work and financial plans, etc.
" This Tagalog term translates approxirnately to "caring for the poor" or "taking care of the poor."
14 This target has been subsequently adjusted by the National Anti-Poverty Commission to make it
consistent with the Medium-Term Philippine Development Plan, 1999-2004. The revised target is to bring
down the poverty incidence from 31.8% to 25-28% by 2004.
5 This would require (roughly) a GDP growth rate of 7.5% per annum, allowing for a population growth
rate of about 2.5% per annum and a poverty reduction to GDP elasticity of 0.4.
16 The 78 provinces and 83 cities in the country are divided into 1,525 municipalities. The municipalities
are classified into six categories based on population, income and access. The municipalities, in turn, are
divided into barangays.
17 Please see Box 1 for subcomponents under the six components of the Program.
Filipino Report Card on Pro Poor Services 123
Chapter VII: Lingap Para sa Mahihirap Program
10. The National Anti-Poverty Commission (NAPC) was given the responsibility to
exercise policy oversight and monitoring functions over the Program, while delivery of
goods and services will be through existing line Departments and Agencies of the
Government, LGUs, and civil society organizations.18 A Project Advisory Board (PAB)
was also created in each Lingap Implementing Agency with representation from at least
three Basic Sectors of NAPC19 and concerned Committees of the House of
Representatives and the Senate. The PABs formulated the agency guidelines for program
implementation.20 A Project Advisory Committee was created at the national level to
advise on the overall Program.21
3. FUNDING
11. The 1999 General Appropriations Act allocated PhP2.5 billion to the Lingap Para
sa Mahihirap Fund to be used exclusively to satisfy the minimum basic needs of poor
communities and disadvantaged sectors through the various programs (to be)
implemented by the govemment agencies.22 Distribution of the resources by agency and
component of the Program is provided in Box 1. According to one account, only about
32% of the PhP2.5 billion is under the control of the National Government Agencies,
23
with the balance (68%) to be allocated by members of Congress (House and Senate).
This effectively vests control on allocation of the lion's share of the funds based on
political (patronage) considerations, with poverty reduction being one element of the
18 See Executive Order No. 92, dated April 12, 1999. The main government agencies tasked with delivery
of the services to poor families (or implementation of the Program) include the Department of Health
(DOH), National Food Authority (NFA), Department of Social Welfare and Development (DSWD), Local
Water Utilities Authority (LWUA), National Housing Authority (NHA), and Cooperative Development
Authority (CDA) [see Box 1]. The Department of Interior and Local Government (DILG) is involved both
in the NAPC and the various coordination committees of the Lingap Program.
'9 The 14 basic sectors of NAPC are (i) artisanal fisher folk, (ii) children, (iii) cooperatives, (iv) farmers
and landless rural workers, (v) indigenous peoples, (vi) non-government organizations, (vii) persons with
disabilities, (viii) senior citizens, (ix) urban poor, (x) victims of disasters and calamities, (xi) workers in the
informal sector, (xii) workers in the formal sector and migrant workers, (xiii) women, and (xiv) youth and
students.
20 The Lingap Para sa Mahihirap Implementing Guidelines were signed on 12 August 1999 and published
in local newspapers on 25 September 1999.
21 The Conumittee comprised NAPC Vice-Chairperson for Government Sector (Committee Chair),
Secretary of Budget and Management (Co-Chair), NAPC Vice-Chairperson for Basic Sector (Committee -
Vice-Chair), Heads of the National Government Agencies implementing the Lingap Program, and National
Presidents of the Leagues of Provinces, Cities, Municipalities and Barangays.
22 If all the approved funds were to be earmarked to help only the 16,100 poorest families initially
identified, it would work out to more than PhP150,000 per family, after allowing for administrative costs.
This is about 250% of the PhP60,000 annual income required for a family to be at the poverty line. If the
Program funds were distributed to all the targeted 400,000 poor families per year, each family should
receive, on average, about PhP6,000 or about 10% of the annual income required for a family to be at the
poverty line.
23 Balisacan, et. al., Approaches to Targeting the Poor, Final Report to NEDA in Support of the UNDP-
Assisted Project on Strengthening Institutional Mechanisms for Convergence of Poverty Alleviation
Efforts, 10 March 2000.
Filipino Report Card on Pro Poor Services 124
Chapter VII: Lingap Para sa Mahihirap Program
latter. Unfortunately, the Lingap Program appears to be very much in the mold of the
preceding three poverty alleviation fimds (PAFs) set up by the government since 1996.24
Box 1: LINGAP PARA SA MAHIHIRAP
Fund Allocation in 1999 National Budget
(in mnillions of PhP)
A. DEPARTMENT OF HEALTH
Food, Nutrition and Medical Assistance
1. Medical Insurance Fund 10
2. Sustansiya para sa masa (Nutritional supplements) 143
3. Garantisadong Parnbata (Early childhood care) 70
4. Medical Assistance Fund 133.5
5. Assistance to RHUs and BHSs 133.5
6. Administrative cost 10
SUBTOTAL 500
B. NATIONAL FOOD AUTHORITY
Price Support for Rice and Corn
1. Erap Sari-Sari Store 90
2. Emergency Relief Operation 80
3. Rice/Com Subsidy Program 90
4. Farmers Alleviation program 120
5. Admninistrative cost 20
SUBTOTAL 400
C. DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT
Protective Services for Children and Youth
1. Protective services for Children and Youth 285
2. Adrministrative cost 15
SUBTOTAL 300
D. LocAL WATER UTILITIES AUTHORITY
Rural Waterworks Systems
1. Shallow or deep well/conmnunal faucet 288
2. Administrative cost 12
SUBTOTAL 300
E. NATIONAL HOusING AUTHORITY
Socialized Housing
1. Housing to be identified by LGUs 149
2. Housing to be identified by Legislators 326
3. Administrative cost 25
SUBTOTAL 500
F. COOPERATIVE DEVELOPMENT AUTHORITY
Livelihood Development
1. Livelihood Programs through Legislators 269
2. Livelihood Programs through Cooperatives 206
3. Administrative cost 25
SUBTOTAL 500
TOTAL 2,500
24 Political support for appropriating funds for poverty alleviation seems to be tied with legislators' control
over these funds, which may lead to "pork-barreling" projects that may have minimal relationship to
poverty reduction. This makes any meaningful targeting of the poor virtually impossible.
Filipino Report Card on Pro Poor Services 125
Chapter VII: Lingap Para sa Mahihirap Program
4. PROGRESS TO DATE
12. As was the case with previous Poverty Alleviation Funds (PAFs), the release of
funds for the Lingap Program encountered substantial delays, which resulted in the
carryover of budget allocation from the 1999 to the year 2000 national budget. The first
tranche of the fund (about 30%) was released in August and September 1999, and the
succeeding funds were released during May - July, 2000. As of July 25, 2000, the six
national government agencies implementing the Lingap Program had disbursed PhPl.02
billion or 48 percent of the total PhP2.13 billion released by the Department of Budget
and Management (DBM). As of September 2000, NAPC reported fund utilization of
71%, or PhPl.5 billion, from the notice of cash allocation releases of DBM amounting to
PhP2.12 billion.25 The entire fund allocated (PhP2.5 billion) was expected to be utilized
by the end of 2000. No new/additional funds were allocated to the Lingap Program in the
2000 Budget appropriations.
13. Implementation on the ground also encountered some problems causing delays.
First, it was only in late 1999 when the responsible agencies started briefing their field
staff on the Lingap Program. Second, multi-agency coordination, particularly in the
identification of the 100 poorest families took some time, with initial beneficiary list of
DSWD (the agency tasked to identify the families using the MBN approach) having to go
through the scrutiny of barangay officials up to the Local Government executives, and in
some cases to their respective Congressional representatives.26 Third, the preparation of
inter-agency memoranda of agreement and other forms of documentation/reports further
absorbed the time of field workers which otherwise could have been productively spent
in addressing the development needs of the targeted poor families. And finally, bidding
rules and complex procurement requirements of necessary equipment to upgrade day care
centers, purchase of textbooks, among others, caused delays in the implementation of the
Lingap Program.
14. It is necessary to take note of the above facts and place in proper perspective the
experience of respondents with the Lingap Program when the Filipino Report Card
survey was implemented. Only a portion (between 30%-50%) of the Program may have
been on the ground in a substantial way when the survey was conducted. As a result, it is
possible that the respondents' awareness of the Lingap Program may be due, in part, to
media exposure, interactions with their elected representatives, and initial outreach
activities by the concerned Agencies, and based on limited actual implementation
experience in their community.
25 Source: NAPC Quarterly report on the Lingap Para sa Mahihirap Program.
26 The Department of Interior and Local Government was tasked to coordinate the selection, listing and
validation of the 100 poorest families in every province and city.
Filipino Report Card on Pro Poor Services 126
Chapter VII: Lingap Para sa Mahihirap Program
5. THE SURVEY
15. The Filipino Report Card survey, conducted during March 26 - April 17, 2000,
sought information on awareness and access of Filipino households to the Lingap Para sa
Mahihirap Program. The survey responses are analyzed for aggregate Republic of
Philippines (RP), by region,27 rural and urban residence, and one measure of poverty
status of the households. This poverty measure is based on household expenditure
(expenditure poverty) in three categories - the poor covering those in the lowest three
expenditure deciles (or, bottom 30%), the middle-income households that fall in the
fourth to sixth expenditure deciles (or, middle 30%), and the rich that are placed in the
top four expenditure deciles (or, top 40%). An overview of the survey results is
presented in the following sections.
6. AWARENESS
16. Less than two-in-three (or 63% of) respondents indicated that they heard about the
Lingap Program (see Table 1 below).28 The proportion is marginally higher in NCR
(68%) and Balance Luzon (67%), and in urban areas (70%). However, it is lower in
Visayas (62%) and Mindanao (56%), and in rural areas (53%). Thus, awareness about
the Program is significantly lower in Mindanao and rural areas, where poverty incidence
is higher.
Table 1: Awareness about the Lingap Program
Awareness (know before)' Total No. of
Region/Area No. of Households Percent Households
RP 761 63 1200
NCR 118 68 174
Balance Luzon 337 67 505
Visayas 150 62 243
Mindanao 156 56 278
Urban 504 70 719
Rural 257 53 481
' Respondent knew of the Program before the interviewer mentioned it.
17. Awareness about the Program is lowest among the poor (57%) followed by
middle-income (63%) and rich (69%), under the expenditure poverty classification (see
Table 2 below). This is particularly disturbing as the Program is intended to serve at least
the poor, if not the poorest of the poor.
27 These are National Capital Region (or NCR), rest of Luzon excluding NCR (or Balance Luzon), Visayas
and Mindanao.
28 The respondents were asked about awareness of the entire Lingap Program rather than awareness of the
six components like ERAP sari-sari stores, communal faucets, etc. It is possible that awareness of the
individual components may be higher, compared to the overall Program since these components are visible
at the community level. For example, when respondents were asked about awareness of ERAP sari-sari
stores in the NFA rice module of the Filipino Report Card, three-in-four Filipinos responded positively.
Awareness about ERAP sari-sari stores was lowest among the poor (67%) and highest among the rich
(87%).
Filipino Report Card on Pro Poor Services 127
Chapter VII. Lingap Para sa Mahihirap Program
Table 2: Awareness about the Lingap Program
Awareness (know before)' Total No. of
Expenditure Group No. of Households Percent Households
Poor 204 57 360
Middle-Income 226 63 360
Rich 331 69 480
'Respondent knew of the Program before the interviewer mentioned it.
7. INCLUSION OF NON-POOR BARANGAYS
18. Between one-in-five and one-in-four sample households (23%) indicated that
their barangays was listed for coverage under the Program (see Table 3 below). The
proportion is somewhat higher than the national average in Visayas and Mindanao (at
26% each). Thus, the deficiency in awareness in Visayas and Mindanao seemed to be
partially offset by a higher proportion of sample households indicating that their
barangay has been listed for coverage under the Program. This is a positive trend. The
proportion of households indicating that their barangay is listed for coverage is lowest in
rural areas (20%). Thus, the rural households seem to be doubly handicapped, first in
terms of low awareness, and, next in a lower proportion indicating that their barangay is
listed for coverage under the Program.
Table 3: Eligibility of Barangays for Coverage Under the Lingap Program
Own Barangavs Listed Total No. of
Region/Area No. of Households Percent Households
RP 270 23 1200
NCR 37 21 174
Balance Luzon 99 20 505
Visayas 63 26 243
Mindanao 71 26 278
Urban 173 24 719
Rural 97 20 481
19. The proportion of households indicating that their own barangay is listed for
coverage under the Lingap Program is almost the same (ranging between 22% and 23%)
for the poor, middle-income and rich households (see Table 4 below). The number of
poor households who indicated that their barangay was included for coverage under the
Program is less than half of that of the non-poor - middle-income plus rich households.
These results do not indicate a pro-poor bias. In fact, a non-poor tilt in terms of the
barangays listed for coverage under the Program is evident.
Filipino Report Card on Pro Poor Services 128
Chapter VII: Lingap Para sa Mahihirap Program
Table 4: Eligibility of Barangays for Coverage Under the Lingap Program
Own Baranga vs Listed Total No. of
Expenditure Group No. of Households Percent Households
Poor 80 22 360
Middle-Income 84 23 360
Rich 106 22 480
8. INCLUSION OF NON-POOR HOUSEHOLDS
20. Less than one-in-seven sample households indicated that they were listed to be
eligible to receive benefits under the Program (see Table 5 below). The proportions for
households in Visayas and Mindanao are marginally higher than in NCR and Balance
Luzon. This is a positive trend given that poverty incidence in the former is higher than
in the latter regions.
Table 5: Eligibility of Households for Coverage Under the Lingap Program
Own Family Listed Total No. of
Region/Area No. of Households Percent Households
RP 172 14 1200
NCR 23 13 174
Balance Luzon 67 13 505
Visayas 40 16 243
Mindanao 42 15 278
Urban 101 14 719
Rural 71 15 481
21. Among the expenditure groups, about an equal proportion (16%) of the poor and
middle-income households indicated that they were listed to be eligible to receive
benefits under the Program (see Table 6 below). This demonstrates ineffective targeting
to the poor. Further, about 10% of the rich households indicated that they were listed to
receive benefits under the Lingap Program that is designed to help the poorest of the
poor. To make matters worse, the non-poor (middle-income plus rich) households listed
to be eligible to receive benefits outnumber the poor by almost two-to-one.
22. In fact, the non-poor may emerge as the primary beneficiaries of this poverty
reduction Program if the observed trend continues.29 This confirms the general
perception that hitherto, the Program has not been successful in targeting the poor. One
of the reasons may have to do with the intervention of Congressional and other political
leaders in the selection of the 100 poorest families and in the distribution of
resources/benefits under the Program. It is necessary to analyze in more detail the
reasons for this dismal targeting of the Program.
29 Projecting these results to the Lingap Program as a whole leads to the conclusion that about 265,000 of
the 400,000 households to be covered under the Program each year are likely to be non-poor, while only
135,000 may be poor.
Filipino Report Card on Pro Poor Services 129
Chapter VII: Lingap Para sa Mahihirap Program
Table 6: Eligibility of Households for Coverage Under the Lingap Program
Own Famil Listed Total No. of
Expenditure Group No. of Households Percent Households
Poor 58 16 360
Middle-Income 59 16 360
Rich 55 11 480
9. ROLE OF ELECTED REPRESENTATIVES
23. The role of people's representatives and other political leaders in the
implementation of the Lingap Program is prominent. This is most vividly demonstrated
by the way in which the members of the Congress and Senate retained control over the
distribution of the lion's share of the Lingap funds. The legislators are represented on the
Program Advisory Boards in each of the National Government Agencies implementing
the Lingap Program. In fact, the funds under the control of each of the legislators can be
released to the beneficiaries only upon the certification by the legislator that the
beneficiaries are his/her constituents.
24. Although the role of the Barangay Captain in implementation of the Program is
not specifically mentioned either in the Program overview or the sector guidelines, the
national president of the Liga ng Mga Barangays (League of Barangays) is a member of
the Program Advisory Committee of the Lingap Program. It is also important to
recognize the key role of the Barangay Captain in the economic, social and political life
at the grassroots level. The Barangay Captain is an elected official that is closest to the
people on the ground. Often, the legislators depend on the Barangay Captains from the
same party for political support at the grassroots. In turn, the Barangay Captain could
solicit and obtain resources for his/her barangay. Thus, the Barangay Captain often
plays an important role in the identification of the target households and in channeling the
program benefits. This is evident under the Lingap Program where the initial list of the
100 poorest families prepared by DSWD (the agency tasked to identify the families using
MBN approach) had to go through the "scrutiny of barangay officials up to the Local
Government executives, and in some cases to their respective congressional
representatives." Further, some of the interventions under the Lingap Program envisage
the maintenance and operation of the completed facilities by the barangays (e.g., rural
water supply), which in turn put the Barangay Captain at the center.
25. Keeping the above in view, the respondents were asked whether they knew (i) a
Congressman or Senator; and, (ii) a Barangay Captain, who will recommend their
household to be included under the Lingap Programn. As a follow-up, the respondents
were asked whether a recommendation from these elected representatives would involve
a bribe. The concept of a bribe in this context encompasses more than giving money and
includes gifts, services, future political support and other means of returning the favor.
26. Alnost one-in-four households (23%) indicated that they know a
Congressman/Senator who will recommend their household to be included under the
Lingap Program (see Table 7 below). The proportion of households knowing a
Congressman/Senator is significantly higher in Mindanao (28%), which may be
Filipino Report Card on Pro Poor Services 130
Chapter VII. Lingap Para sa Mahihirap Program
beneficial in remedying the awareness aspects. The results indicate that rural households
have less access to members of Congress than their urban counterparts. This may further
disadvantage the potential of the former to be included under the Program.
Table 7: Recommendation from Members of Congress/Senate
Know Member of Know Member of Congress/Senate Total No. of
Region/Area Congress/Senator Who Will Recommend With Households
________ _ ______________ XNo Bribe Bribe _ _ _
RP (No. of HH) 278 221 55' (20%) 1200
Percent 23 18 5
NCR (No. of HH) 44 29 142(32%) 174
Percent 25 17 8
Balance Luzon (No. of HH) 112 92 19 (17%) 505
Percent 22 18 4
Visayas (No. of HH) 44 40 4 (9%) 243
Percent 18 16 2
Mindanao (No. of HH) 78 60 18 (23%) 278
Percent 28 22 6
Urban (No. of HH) 172 136 35 (20%) 719
Percent 24 19 5
Rural (No. of HH) 106 85 20 (19%) 481
Percent 22 18 4
Two respondents either did not know or refused to answer this question.
2 One respondent either did not know or refused to answer this question.
Note: Percentages in parentheses are computed using the number of households that know member of Congress/Senate.
27. Of the households that know a Congressman/Senator who will recommend their
family to be included under the Lingap Program, the majority indicated that such a
recommendation could be obtained with no bribe (see Table 7 above). However, about
one-in-five (20%) thought that such a recommendation might require a bribe. The
proportion is highest for NCR (32%) and lowest for Visayas (9%). About equal
proportions (19% and 20% respectively) of rural and urban households felt that obtaining
the recommendation would involve a bribe.30
28. The proportion of households knowing a Congressman/Senator that would
recommend a family to be included under the Lingap Program is positively correlated
with the expenditure status of the households (see Table 8 below). Thus, the proportion
of poor households that know a Congressman/Senator is lowest (19%), followed by
middle-income households (23%), with the highest proportion (27%) among the rich.
This appears to put the poor at a disadvantage as compared to the non-poor (middle-
income and rich) in getting a recommendation to have their household included under the
Program.
30 It is important to place these findings in perspective by looking at the proportion of households in the
total number of sample households in each of the categories indicating that a bribe would be required to
obtain a reconmnendation. This proportion is small ranging from a low of 2% in Visayas to a high of 8% in
NCR.
Filipino Report Card on Pro Poor Services 131
Chapter VII: Lingap Para sa Mahihirap Program
Table 8: Recommendation from Members of Congress/Senate
Know Member of Know Member of Congress/Senate Total No. of
Expenditure Group Congress/Senate Who Will Recommend With Households
No Bribe Bribe
Poor - No. of HH 67 55 11' (16%) 360
Percent 19 15 3
Middle-Income - No. of HH 81 68 13 (16%) 360
Percent 23 19 4
Rich - No. of HH 130 98 31' (24%) 480
Percent 27 20 6
One respondent either did not know or refused to answer this question.
2 Two respondents either did not know or refused to answer this question.
Note: Percentages in parentheses are computed using the number of households that know Member of Congress/Senate.
29. A majority of households in all expenditure groups indicated that the
recommendation from a Congressman/Senator (for them to be included under the Lingap
Program) could be obtained with no bribe (see Table 8 above). However, 16% each of
the poor and middle-income households said that it would involve a bribe. The
proportion is higher (24%) for the rich households.31 It will be instructive to explore why
a larger proportion of the non-poor think that obtaining a recommendation would involve
a bribe. Perhaps, the politicians expect a bribe from those who could afford to give.
30. More than two-in-three households (68%) responded that they know the
Barangay Captain who will recommend their household to be included under the Lingap
Program (see Table 9 below). The proportion is highest (77%) for the sample households
in Mindanao, followed by Balance Luzon (71%). The proportion is relatively low in
Visayas (63%) and lowest for those in NCR (51%). The proportion of rural households
indicating that they know the Barangay Captain who will recommend (75%) is
significantly higher than that for urban households (63%). The reasons for the regional
and rural-urban differences in the proportion may be worth exploring.
31 The proportion of households in the total number of households in each of the poverty categories
indicating that a bribe would be required to obtain a reconmmendation, also confirms this trend, even though
the proportions are much smaller.
Filipino Report Card on Pro Poor Services 132
Chapter VII: Lingap Para sa Mahihirap Program
Table 9: Recommendation from Barangay Captain
Know Barangay Know Barangay Captain Who Will Total No. of
Captain Recommend With Households
Region/Area No Bribe Bribe
RP (No. of HH) 817 732 84' (10%) 1200
Percent 68 61 7
NCR (No. of HH) 89 74 15 (17%) 174
Percent 51 43 9
Balance Luzon (No. of HH) 360 331 28' (8%) 505
Percent 71 66 6
Visayas (No. of HH) 154 139 15 (10%) 243
Percent 63 57 6
Mindanao (No. of HH) 214 188 26 (12%) 278
Percent 77 68 9
Urban (No. of HH) 455 403 51' (11%) 719
Percent 63 56 7
Rural (No. of HH) 362 329 33 (9°%) 481
Percent 75 68 7
'One respondent either did not know or refused to answer this question.
Note: Percentages in parentheses are computed using the number of households that know Barangay Captain.
31. Of the households that know the Barangay Captain who will recommend their
household to be included under the Lingap Program, one-in-ten (10%) indicated that such
a recommendation might involve a bribe. The proportion is highest in NCR (17%),
followed by Mindanao (12%), and Visayas (10%), with Balance Luzon at the low end
(8%). A slightly higher proportion (11%) of urban households indicated the need for a
bribe as compared to their rural counterparts (9%)*32
32. Almost three-in-four (or 73% of) poor households indicated that they know the
Barangay Captain who would recommend their households to be included under the
Lingap Program. This compares with just under two-in-three rich households (65%),
with the proportion for middle-income households (68%) falling in between. It is worth
exploring why a larger proportion of the poor know the Barangay Captain as compared to
the non-poor. A partial explanation may be that a Barangay Captain is expected to know
and solve the neighborhood problems, which mostly involve the poorer members of the
barangay.
32 Placing these findings in the overall perspective of the sample and the population it represents, the
proportion of households in the total number of sample households in each of the categories indicating that
a bribe would be required to obtain a recommendation is 7%, varying from a low of 6% in Balance Luzon
and Visayas to a high of 9% in NCR and Mindanao.
Filipino Report Card on Pro Poor Services 133
Chapter VII: Lingap Para sa Mahihirap Program
Table 10: Recommendation from Barangay Captain
Know Barangay Know Barangay Captain Who Will Total No. of
Captain Recommend With Households
Expenditure Group No Bribe Bribe
Poor - No. of HH 261 233 28 (11%) 360
Percent 73 65 8
Middle-Income - No. of HH 245 224 21 (9%/6) 360
Percent 68 62 6
Rich - No. of HH 311 275 35 (11%) 480
Percent 65 57 7
'One respondent either did not know or refused to answer this question.
Note: Percentages in parentheses are computed using the number of households that know Barangay Captain.
33. Overall, the experience with the Lingap Program to date indicates considerable
problems in targeting the goods and services to the poor, let alone the poorest among
them. In fact, the bulk of the benefits from the Program seem to be captured by the non-
poor. The mechanisms for selection of families for inclusion under the Program appear
to facilitate leakage of the benefits to non-target clientele. Thus, the Lingap Program
suffers from many of the same problems that plagued the earlier Poverty Alleviation
Funds (PAFs) in the Philippines. It should, therefore, not be surprising that a majority of
Filipinos predicted that this Program will have little or no impact on poverty reduction.33
10. KEY FINDINGS AND RECOMMENDATIONS34
34. Awareness about the Lingap Para sa Mahihirap Program among all households is
impressive given its short history. However, awareness among the poor and rural
households is lagging which is a cause for concern. Eligibility for coverage seems to be
interpreted generously allowing for inclusion of a large number of the better-off
barangays and non-poor households. The Report Card survey results show that the
number of non-poor households indicating that their barangays are listed as eligible to
receive benefits under the Program is more than twice as large as that of the poor.
Further, the non-poor households listed as eligible to receive benefits under the Program
outnumber the poor by a margin of almost two-to-one. This is a disappointing start, as
clearly there is inappropriate targeting taking place in the Program.
35. Active involvement of the political establishment in the identification of target
beneficiaries and in the control and allocation of funds seems to compound the problem
of inclusion of the non-poor. The poor seem to be put in double jeopardy because they
often do not know the political leaders that would recommend their family to be included
33 According to a September-October, 1999 SWS national survey, 51% of Filipinos believe that the Lingap
Program will have no impact and 9% believe that it will make things worse. Only 39% of Filipinos believe
that this Program will make things better.
34 The systemic problems of delays in release of funds and bureaucratic weaknesses in the Philippines are
well known. Resolution of these problems is critical for the success of all development programs, and
especially poverty reduction programs. However, these are not covered in the following discussion, as a
more comprehensive approach that is beyond the scope of this chapter is required to address the systemic
problems.
Filipino Report Card on Pro Poor Services 134
Chapter VII. Lingap Para sa Mahihirap Program
under the Program35 and/or have the ability to pay a "bribe" to get such a
recommendation. Again, the non-poor households seem to enjoy an unfair advantage in
obtaining recommendations from political leaders for inclusion under the Program.
36. A key survey finding is that the more local the level of government, the less the
perception of corruption among the governed.36 The proportion of households (among
those who know their political representatives) who thought that a bribe would be
required to get a recommendation from a Congressman/Senator is more than double that
for a Barangay Captain (20% vs. 10%).
37. The relatively higher degree of corruption perceived by sample households in
NCR, both at the Barangay Captain and Congressman/Senator levels, is cause for
concern. This is particularly important for the large number of urban poor in NCR who
need access to the Program goods and services. The Program seems to be working
somewhat better in Visayas with the highest proportions of both barangays and
households listed for coverage. In addition, Visayas has the lowest levels of perceived
corruption (need for bribe) at the local (Barangay Captain) and higher (Congressman or
Senator) levels. It is worthwhile to explore the reasons and draw out the major strengths
in Visayas that may be considered for replication in other regions.
38. The Lingap Para sa Mahihirap Program requires a thorough assessment and
overhaul before additional funds are appropriated and released. The following
recommendations highlight some of the steps to be taken to reform the Program and
make it better targeted and more responsive to the needs of poor Filipinos.
39. One of the key findings of the Report Card Survey is the relatively low awareness
of the Lingap Program among the households in Mindanao and rural areas, and arnong
the poor. These are the very households, which the Program is intended to help. Tlhus,
improving the awareness of the Program among the target groups is a high priority. The
Report Card survey results show that TV and radio are the two most popular formal
sources of information to clients (including the poor) on government programs, matching
or exceeding friends and relatives (informal sources) in importance. The Lingap
Program should mount a concerted information campaign on the Program covering such
aspects as Program benefits, eligibility criteria and how clients could access the Program.
3 The poor are clearly at a disadvantage in terms of knowing their Congressman/Senators, who control
more than two-thirds of the Lingap Program funds.
36 This is confirmed by the findings from previous surveys by the Social Weather Stations. See Manila
Standard, October 26, 2000.
37 On average, about 47% of all households indicated TV as the most popular formal source of information
on government services in the five sectors (elementary education, health, potable water, housing and
subsidized rice) covered in the Report Card survey, followed by radio (32%), with newspapers and
magazines as a distant third (13%). The corresponding proportions for poor households are: TV - 40%,
radio - 32% and newspapers and magazines (8%). Friends and relatives are the most important informal
source of information to the clients in general (35%) and the poor in particular (39%).
Filipino Report Card on Pro Poor Services 135
Chapter VII. Lingap Para sa Mahihirap Program
40. Another key finding of the Report Card Survey is that the closer the level of
government to the grassroots, the more likely the constituents, particularly the poor,
know their representatives and the less the perception of (and scope for) corruption in the
delivery of government programs at the local level. Therefore, decentralization and
localization of beneficiary identification and resource allocation under the Lingap
Program, with the involvement of LGUs and Barangay Captains should be adopted. This
would also facilitate better tailoring of the Program components to the needs and
priorities of the client groups, as the people's representatives at the grassroots are likely to
be better informed about local conditions. Further, increased involvement of civil society
organizations would complement and strengthen this process,38 by enhancing
transparency of operations and better accountability to clients.
41. There is merit in reducing the number of activities under the Program from more
than a dozen at present to a limited few, say, four to six that are of the highest priority to
the poor and are distinct from the regular (ongoing) programs and activities of the
implementing NGAs.39 The activities selected should be amenable to narrow targeting.
It is futile to try to enforce strict targeting of programs to poor households that have a
broader community focus and are often of the same nature as other regular government
(supported) programs.40
42. Involvement of the political establishment in the selection of beneficiaries, and in
the control and allocation of Program funds may compound the problem of targeting,
especially in light of the traditional patronage and reciprocity systems prevailing in the
Philippines. At the same time, it is recognized that political commitment to, and
legislative support for, poverty reduction are intertwined with control over the resources
for poverty alleviation by members of Congress and Senate. As a result, political
patronage considerations seem to have an overriding influence on the allocation of
resources among different groups. This raises a fundamental dilemma in targeting the
limited resources to the poor versus Congressional control over resources. The challenge
is to reduce and eventually eliminate political intervention in the allocation of poverty
reduction funds without losing the legislators' support for appropriation of these funds.
3 Strengthening the involvement of civil society organizations not only in Project Advisory Boards and
coordination bodies, but also as active partners in the implementation of the Lingap Program would be
beneficial in many ways. The civil society organizations are often more knowledgeable about who the poor
are, where they are located and what their constraints and priorities are, because they have been working
with these groups in the field. Thus, the benefits of increased involvement of civil society organizations
include better identification of the target beneficiaries and improved ability to reach them, more effective
delivery of goods and services, strengthening capacity of recipientlbeneficiary groups and individuals,
enhanced transparency of the operations, and better accountability to the clients. They should be working
side-by-side with the local government officials, including the Barangay Captains.
39 For example, the components on water supply, housing, and livelihood programs are similar (parallel) to
other ongoing programs implemented by the NGAs.
40 According to the Philippines Poverty Assessment, this broad focus has resulted in a Program that may be
too dispersed as an area program but too expensive as a means-tested program for targeting. See
Philippines Poverty Assessment, The World Bank, 2000.
Filipino Report Card on Pro Poor Services 136
Chapter VII: Lingap Para sa Mahihirap Program
43. Rule-based targeting criteria with little room for discretion and strict enforcement
of the application of the criteria may reduce major leakages. However, the capacity of
NGAs to implement such targeting is weak and needs to be strengthened in the medium-
terrn. In the meantime, geographic targeting may be a viable option, albeit with increased
attention to the concentrations of the poor and the intensity of their poverty. An example
of a possible targeting mechanism is the operation of special stores selling subsidized
basic commodities in poor areas.
44. Monitoring should be recognized as an important management tool to identify
problems and constraints facing Program implementation and should be the basis for
prompt corrective actions to resolve problems and maintain the pace and course of
implementation of the Program. While periodic reports by the implementing NGAs are
useful, they often tend to measure the inputs (goods and services provided,
disbursements, etc.) and/or broad outcome indicators (such as literacy and mortality
rates) after a considerable time has elapsed. It is important to obtain feedback from the
ultimate clients, the poor, on such aspects as suitability of the interventions, access, use,
satisfaction, leakages and complaints at different stages of implementation of the
Program. Civil society organizations would be invaluable partners in bringing forth such
information in a timely manner, especially at the micro-level. In addition, Program-wide
client feedback should be captured through such instruments as the Report Card.41 As the
utilization of the allocated PhP2.5 billion for the Lingap Program are expected to have
been completed only by the end of 2000, the next round of the Report Card Survey
should incorporate a module to capture the client feedback on the Prograrn. The client
feedback should be an important input to the in-depth assessment of the Lingap Program,
42
before continuation and/or further expansion of the Program is considered.
45. Periodic auditing of the results of the Program should be undertaken by
independent agencies such as the Commission on Audit (COA) and credible NGOs. The
audit findings should be made public and should be taken into account in the design of
future interventions on poverty reduction.
46. The Lingap Para sa Mahihirap Program has the right intentions and appears to be
achieving at least some success in the Visayas. The challenge is to reform and overhaul
the Program incorporating the lessons. The poor in the Philippines should be getting a
bigger share, if not all, of the benefits from the poverty reduction programs. If the
Lingap Program cannot be overhauled along the lines suggested above, then the
government should seriously consider discontinuing it.
41 The Report Card findings presented in this paper are based on the results from the initial (partial)
implementation of the Lingap Program.
42 In the medium-term, the impact of the Program may be assessed through changes in MBN indicators in
the barangays, municipalities, provinces and regions.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
CHAPTER VlI: INSTITUTIONALIZATION OF THE REPORT CARD
1. WHY INSTITUTIONALIZE THE REPORT CARD?
1. The Filipino Report Card on Pro-Poor Services assesses the performance of
selected govermment services based on client experience. These services are basic health,
elementary education, housing, potable water, and food distribution. The Report Card
results throw light on the constraints that the Filipinos face in accessing public services,
their views about the quality and adequacy of services, and the responsiveness of
government officials. They provide valuable insights on the priorities and problems
faced by the clients and how the various services may be better tailored to the needs of
Filipinos, in particular, the poor.
2. It is expected that the service providers' would take the Report Card findings into
consideration in adjusting their programs to improve service delivery.2 However, many
past assessments did not have a lasting impact on service delivery because they were
often one-shot exercises with no effective means to follow through. It is necessary to
implement the Report Card surveys periodically in order to assess the improvements in
service delivery from a bottom-up perspective. The incentive to respond with concrete
improvements would be greater, if service providers know they will be tracked again.
Thus, the Report Card mechanism should be institutionalized as an ongoing process to be
repeated periodically (say, at 12 to 18-month intervals).
3. Such a regular mechanism is timely, as enhanced accountability of the State to the
people (clients) has become an important area of development focus in the past decade.
Various initiatives have been underway on such related aspects as corruption3 and civil
service reform.4 Further, the vital role of a socially responsible private sector and a
vibrant civil society in enhancing good govemance and reducing poverty is being
increasingly recognized.5 In the aftermath of the non-violent People Power II revolution,
there is general consensus in the Philippines that citizens must continue to monitor the
government to ensure improved performance and greater accountability.
1 Including government agencies, private sector and civil society organizations.
2 A number of information, dissemination and advocacy actions are proposed to facilitate response from
service providers. These are presented in Chapter I.
3 For example, see World Bank, East Asia and Pacific Region, Philippine Country Management Team,
Combating Corruption in the Philippines, Manila, May 2000.
4 In the past decade, civil service reform has been an important development initiative, often supported by
bilateral and multilateral aid agencies, including the World Bank.
5 Promoting good governance and poverty reduction are important objectives of the World Bank's Country
Assistance Strategy for the Philippines.
Filipino Report Card on Pro-Poor Services 138
Chapter VIII: Institutionalization of the Report Card
2. GLOBAL EXPERIENCE WITH REPORT CARDS
4. While citizen report cards are new to most governments and their agencies, these
are now being used as one way to assess the performance of public agencies in the
delivery of services in Canada, Denmark, Ghana, India, Sweden, Ukraine, the United
Kingdom, and the United States. It is instructive to review the institutional arrangements
for report cards in these countries in exploring options for institutionalizing the Report
Card in the Philippines.
5. The institutional arrangements for the report cards range from independent non-
government policy research institutions, central statistical agencies of government,6
government service provider agencies, and federal coordinating agencies. Three main
types (models) of institutional arrangements for the report cards are discussed briefly
below.
Model 1. Report Card by Civil Society Organization
6. Under this model, the initiative for preparing the report cards comes from a civil
society organization - often a policy research and advocacy institute. A primary example
of this is the Public Affairs Centre (the Centre) in Bangalore, Karnataka State, India.
Aware of the anecdotal evidence on client dissatisfaction with municipal services in
Bangalore City and the inability of individual citizens to influence the performance of
public service providers, the Centre initiated the preparation of a report card on public
services "as a means to help civil society address issues of service quality and
accountability, with the power of information."7 The report card was expected to
stimulate collective action by citizens on their dissatisfaction with the services provided
by public agencies. Also, it was to provide an opportunity for reform-minded leaders of
public agencies to design corrective actions and bring in strategic reorientation.
7. The initial report card surveys undertaken by the Centre were funded largely out
of grants from local and external sources.8 The first report card was prepared in 1993 and
the results were presented to citizens, service providers, city administrators, print and
audio-visual media, and professional groups. The response from a large majority of the
stakeholders was positive, although a couple of service providers were defensive.
Recognizing the value of the feedback from the first report card, the city fathers from
Ahmedabad (Gujarat Sate), Bangalore, and Pune (Maharastra State) conrmissioned the
Centre to undertake/repeat the report card on client satisfaction with municipal services in
their cities.
6See, for example, Government Statistician, Ghana Statistical Service, "Using Core Welfare Indicators
Survey for Poverty Monitoring in Ghana - Some Selected Results from the 1997 Ghana Core Welfare
Indicators Survey, " Accra, 1997.
7Gopakumar, K., Millennial Survey of Public Services in Karnataka: Citizens'Feedback on the State of the
STATE, Public Affairs Centre, Bangalore, Karnataka State, India, February 2000.
s For example, the Ford Foundation.
Filipino Report Card on Pro-Poor Services 139
Chapter VIII: Institutionalization of the Report Card
8. Based on the successful outcomes of these efforts, the Chief Minister of
Karnataka State requested the Centre to prepare a report card on essential public services9
in the State. The Centre undertook the Millennial Survey of Public Services in Karnataka
in 2000. The survey had two significant components: (i) citizen feedback on the
qualitative and quantitative dimensions of the selected public services; and,
(ii) independent assessment of the facilities/services by the survey personnel. The citizen
feedback generated a comprehensive picture on the various dimensions of public service
delivery and some broad indicators on fundamental development rights and entitlements.
The independent observations were useful for triangulating (user/client,
observer/enumerator and service provider) the survey findings. Once again, the results
were well received by all stakeholders and follow-up actions to improve service delivery
are under way with support from the highest levels of government in Kamataka.
9. The work by the Public Affairs Centre is truly exceptional and is largely the result
of the vision and dynamism of its Chairman. The strength of this model is that it is
independent of the government/public service providers and interest groups. The entity
undertaking the preparation of the report cards is a non-profit and professionally
competent organization, which is well recognized both within the country and outside.
Its credibility with government and the public is high. The report card findings are taken
seriously by all parties, although some public service providers may not act on them.
This is a testimony to the stature of the Chairman, and as a result of his remarkable work,
the Government of India has asked the Centre to conduct a millennial report card on
public services for the entire country.
10. The limitations of this model relate to the difficulties in replicating the unique
situation. Not many civil society organizations are likely to have the technical capacity
and willingness to undertake/sustain such an exercise. In the absence of a well-respected
champion behind the report card, the government service providers and coordinating
agencies may resist the findings and/or undermine them. As the exercise relies on
external funding, its long-term sustainability (i.e., repetition of the report card surveys) is
uncertain.
Model 2. Report Card by Government Service Provider Agency
11. This model is characterized by a govermment service provider agency initiating
the preparation of the report card, with the actual survey and draft report preparation
often contracted out to a commercial organization. The draft report is vetted by the
agency, finalized and sometimes disseminated to the public. The focus of the report card
may be confined to a single program (service) or a facet relevant to a program
administered by the agency.
12. Examples of countries using this model include Canada and the United Kingdom
(UK). Thus, in Canada, federal government departments and some provincial
government departments have been active in facilitating the preparation and
9 The services included safe (drinking) water, education, health services, public distribution system for food
and other basic comnmodities (fair price shops), and road transport (including bus service).
Filipino Report Card on Pro-Poor Services 140
Chapter VIII: Institutionalization of the Report Card
dissemination of report cards on the services they provide.' In the United Kingdom, the
Social Research Branch of the Department of Social Security has been involved in
preparing and disseminating report cards on different programs administered by the
Department for more than a decade.11 The results of the report card surveys are often fed
back into the public expenditure allocation processes in the form of either voluntary or
mandated reporting requirements to legislatures.
13. A major strength of this model is the ownership of the exercise by the public
agency. Preparation of the report card by a private firm brings some degree of
independence to the exercise. The preliminary results are available to the agency and its
views and feedback would have been included in the final report. The same factors may
become weaknesses in the model when viewed from a different perspective. As the
report card preparation is sponsored, and its implementation overseen by the service
provider, the public at large, government coordinating agencies and legislators may
question the independence and objectivity of the findings. In addition, the information
collected is usually tailored to meet the requirements of the public agency, and is not
packaged for the consumption of, and advocacy by most citizen groups.
Model 3. Report Card by Government Oversight (Coordinating) Agency
14. Typical arrangements under this model involve a government coordinating
agency engaging an independent civil society organization to design and prepare the
report card in consultation with (but independent of) the public service provider agencies.
The experience in the United States of America is instructive in this context. The
Government Performance and Results Act of 1993 requires the executive branch of the
federal government to report to Congress (legislative branch) on the performance of
various government agencies and the results achieved. To comply with the provisions of
the Act, the President of the United States issued an order setting customer service
standards and directed that the standard of quality for government services match that of
business. Since then, all federal government agencies have been preparing annual
performance plans. The General Accounting Office (GAO), a Congressional watchdog
agency of the government, has been reviewing the plans, suggesting improvements and
providing Congress with assessments during the latter's review of federal agency budget
submissions.'2 However, an independent monitoring of the results (e.g., improvements in
service delivery) on implementation of the plans was missing.
1° For example, see COMPAS, Income Security Programs Client Service Study: Report to Human
Resources Development Canada, August 1988.
" The Department of Social Security lists several research reports that are based on customer satisfaction
surveys. They include: (i) the Benefits Agency National Customer Survey, 1991; (ii) Customer
Perceptions of Resettlement Units, 1992 and Resettlement Agency Customer Satisfaction Survey, 1994;
(iii) Child Support Unit National Client Surveys, annual, 1992 to 1995, and Customer View on Service
Delivery in the Child Support Agency, 1998; (iv) Contributions Agency Customer Satisfaction Survey,
annual 1992 to 1994; and (v) War Pensions Agency Customer Satisfaction Survey, 1994. See Department
of Social Security, Research Reports, 15 February 2000.
12 United States General Accounting Office, Report to Congressional Requesters, "Managing for Results.
Opportunities for Continued Improvements in Agencies'Performance Plans," (GAO/GGD/AIMD-99-215),
July 1999.
Filipino Report Card on Pro-Poor Services 141
Chapter VIII: Institutionalization of the Report Card
15. To fill this gap, the General Services Administration (GSA), a government
coordination agency, was instructed to devise a mechanism for assessing performance of
the federal agencies. The American Customer Satisfaction Index (ACSI) developed
jointly by the University of Michigan Business School, American Society for Quality (a
professional society), and Arthur Andersen (a private consulting firm), was selected by an
inter-agency board as the tool for assessing the performance of the federal agencies.'3
Under the sponsorship of the President's Management Council, the GSA engaged the
consortiumi to undertake the 1999 Customer Satisfaction Survey of Federal Agencies in
the United States. The Survey covered 30 customer segments (identified in consultation
with the agencies) of 29 federal agencies, which included most of the high impact
agencies that dealt with 90% of the federal government's customers. The results of the
Survey were presented to Congress. Thus, a link between agency performance, as
measured by a report card based on client satisfaction, and the budget allocations to the
agencies has been established.
16. Among the three models discussed above, this third model is the most
comprehensive both in terms of product and process. A mandate for undertaking the
report card was established through legislation and resources were allocated for this
purpose. An independent and credible consortium of institutions was recruited to prepare
the report card. A well-established methodology was used to assess the performance.
The consultation process with public service providers was appropriate, but not
dominant. Most important, the report card findings (results) were fed back not only to
the service providing agencies and the public but also into the budget allocation process
of the Congress.
3. INSTITUTIONALIZING THE REPORT CARD IN THE PHILIPPINES
17. The rationale for institutionalizing the Filipino Report Card is provided in the first
section (Section 1) of this chapter. The discussion on the three types of institutional
arrangements in use in different countries in the preceding section (Section 2) indicates
that the third model is the most desirable one to consider for adoption in the Philippines,
with appropriate modifications. The first round of the Filipino Report Card incorporated
many of the desirable attributes of the third model.'5
13 The ACSI was developed by the independent consortium in 1994 as an economnic indicator of satisfaction
with quality, and has since been used for assessing client satisfaction with the services provided by mnajor
private companies.
14 The consortium comprises the University of Michigan Business School, American Society for Quality
and Arthur Andersen.
15 For examnple, obtaining client feedback on public services, which is at the core of the Filipino Report
Card, has strong support from the highest levels of the Government of the Philippines. The SWS, an
independent and credible institution with a good reputation, was engaged to undertake the design and
execution of the Report Card survey instrument. A consultative/participatory process is adopted in
designing the survey, involving a wide spectrum of stakeholders including government service providers.
Service provision by public agencies was assessed using the private sector as a benchmark. The Report
Card findings are (proposed to be) shared with the service providing agencies and the public, as well as fed
into the budget allocation process through the DBM.
Filipino Report Card on Pro-Poor Services 142
Chapter VIII: Institutionalization of the Report Card
18. Institutionalizing the Report Card tool in a government oversight agency that
feeds the results directly into the public expenditure allocation process is highly
advantageous as it ties the budget allocations not only to past perfornance, but also to the
constraints that remain to be tackled for improving future performance. Thus, the "power
of the purse" could be used to correct deficiencies, ameliorate constraints and improve
performance. This should prove to be an effective means for improving the delivery of
public services and enhancing the accountability of public agencies. It also provides an
opportunity for citizens to get involved in the process of allocating public resources to
address their basic needs. This is particularly beneficial to the poor, given their relatively
weak voice as users and purchasers of public services.
19. In recent years, the Department of Budget and Management (DBM) has initiated a
program on development of performance-based indicators for public agencies to assess
their effectiveness, and guide future budget allocations. Three key areas proposed for
measurement of results and performance are: (i) outputs, (ii) processes, and (iii) client
satisfaction. To this end, the DBM has expressed a strong interest in institutionalizing the
Report Card, piloted jointly by the SWS and the World Bank, as a way of obtaining
regular user feedback on key public services.16 It is expected that the incentive for
service providers to respond to client feedback will be enhanced if they know that they
will be monitored regularly by the DBM, using the Report Card instrument as one of the
three key mechanisms to assess performance and allocate resources.
20. The government's new initiative on performance-based budgeting provides an
opportunity to channel user feedback into decisions relating to public spending. The
DBM can increase public accountability by seeking client feedback on major programs
and expenditures of government agencies and by using the results as an input into the
budget allocation process. It would be a strong complement to (and a valuable cross-
check on) the agency reports on outputs/results as well as those on processes. It would
create a comprehensive performance monitoring system by augmenting the DBM's
ongoing output and process monitoring efforts with client feedback.
21. The idea of institutionalizing the Report Card in the DBM to assess users'
satisfaction with public services on a regular basis is compelling. Both the DBM and the
Bank agree that instead of reinventing the wheel, the Report Card tool, which has
recently been tested in the context of five public services in the Philippines, can be
applied, with appropriate modifications, to cover a broader range of public services and
agencies that are engaged in service delivery to Filipinos, including specific target groups
such as the poor. Preliminary discussions indicate implicit support for this approach from
NEDA.
22. Implementation of the Report Card survey, analysis and report preparation could
be contracted out by DBM to a credible and independent civil society organization with
16 The Report Card was piloted in close collaboration with NEDA, which has taken the leadership in
coordinating the inputs from government service providers. Also, NEDA sponsored and chaired the
consultation workshops in June 2000 and provided feedback on the draft Report Card findings.
Filipino Report Card on Pro-Poor Services 143
Chapter VIII: Institutionalization of the Report Card
substantial expertise and experience in such activities.'7 An advisory anel comprising
representatives of service providers,18 other key government agencies, private sector,
the Congress, civil society organizations, including sectoral (interest) groups and
prominent experts, should be convened to advise and guide the Report Card exercise and
its integration with the budgetary processes. It may be worth exploring the feasibility of
utilizing the multi-stakeholder advisory panel on the budget set up by the government in
mid-2000 for this purpose, with appropriate augmentation of its membership.2' Involving
the representatives of service providers from the private sector and civil society in the
advisory panel would help bring their perspectives to bear on the Report Card and budget
exercises. Also, it would strengthen the complementarity between different service
providers, minimize duplication, and enhance the effectiveness of all service providers.
It may prove to be a pragmatic means for the government to influence service providers
in the private and civil society sectors, without resorting to additional heavy-handed
regulatory mechanisms.
23. The DBM has agreed to build and expand on the pilot Report Card exercise for
institutionalization of client feedback on key public services. It plans to engage a
qualified civil society organization to design and implement the second round of the
22
Report Card. There are a number of reputed local agencies in the Philippines, which are
experienced in conducting client feedback surveys, and the DBM will outsource this
activity based on a transparent selection process. The selection of a credible and
qualified civil society organization to monitor performance of public agencies will
enhance the independence and integrity of the findings, and strengthen civil society-
government partnership. Development partners will assist the DBM in institutionalizing,
through the expanded Budget Dialogue Group. Their participation in selecting the
indictors for monitoring perfornance and analyzing the data will increase the usefulness
of the Report Card.
4. IMPROVING THE REPORT CARD
24. Continued assessments of the concepts and measures used in the pilot Report
Card should be undertaken to further improve the tool leading to progressively better
measurement of client satisfaction in the coming years. For example, the sampling frame
and phrasing of some questions will require refinement during the next round. Further,
the Report Card coverage should be expanded gradually to encompass a larger array of
public services. Eventually, the customer services provided by all government agencies
should be covered, along the lines of the US model (Model 3) described in Section 2 of
this chapter.
17 A number of independent organizations competent to undertake the survey exist in the Philippines. They
include the Social Weather Stations, Development Academy of the Philippines, and Pulse Asia.
iFrom government, private sector and civil society organizations.
9 For example, NEDA and NAPC.
20 For example, Chambers of Commerce and Business Clubs.
21 The advisory panel on the budget is the Budget Dialogue Group. It is expected that membership in the
core group will be expanded by increasing civil society participation. In addition, multi-stakeholder
working groups will be set up to support the core group.
22 This work will be initiated in the third quarter of 2001 by the DBM.
Filipino Report Card on Pro-Poor Services 144
Chapter VIII: Institutionalization of the Report Card
Focusing on Key Performance Indicators
25. The first (pilot) round of the Report Card spread the net wide and tried to cover as
many facets of service delivery as possible within the budget. Based on the lessons
learned, it is recommended that the scope of future Report Cards be limited to a few
principal performance indicators. Ideally, the performance indicators selected under the
Report Card should have a significant overlap with those (to be) used by the DBM in
monitoring outputs and processes. This would facilitate the triangulation of the results
obtained from the three perspectives (i.e., outputs, processes and client feedback) and
provide a comprehensive picture of the performance.
Revising the Questionnaire
26. The need for revision of the questionnaire is another important lesson emerging
from the first round of the Report Card. First, there are some overlaps in the survey
questions that should be minimized and eliminated. Second, some of the questions need
to be modified to bring greater clarity. Third, other questions should be eliminated as
they do not seem to elicit useful/important findings.23 Fourth, the questionnaire should
be augmented in some areas and the process of selection of households modified to cover
those poor groups that have been left out in the first round.24 Finally, the main focus of
the questionnaire should be tailored to the selected principal performance indicators that
are common with those used for monitoring outputs and processes by the DBM.
Improving Cost-Effectiveness
27. Revision and refinement of the questionnaire should bring about considerable
savings as the cost of the survey depends critically on the number of questions. This
should make it more cost-effective and sustainable. Also, limiting the scope to a few
principal and common performance indicators should focus the attention of citizens, the
public service providers and key policy makers and result in concrete actions. Above all,
it should further focus the attention on improved service delivery to the poor.25
23 For example, some of the questions on quality in the subsidized (NFA) rice module seem to overlap.
Some questions in the housing module may require greater clarity. The sets of questions on corruption -
giving bribes (return of favors), reporting and satisfaction with follow-up actions - in the five sector
modules did not bring forth significant findings and could be revised/eliminated in subsequent rounds.
24 For example, the design of the housing module and the selection of households from among permanent
structures seemed to have resulted in under-representation of the informal settler population including
squatters in the sample. Similarly, access to health insurance by difference groups could be better covered
in the health module. To this end, the questionnaire and the household selection process will be
modified/adjusted for the next round.
25 The budget deficit in the Philippines is projected to be as high as PhP200 billion. Thus, limited resources
allocated for basic services should be used judiciously. In particular, this means ensuring that scarce public
resources are directed towards providing for the priority needs of the poor.
FILIPINO REPORT CARD ON PRO-POOR SERVICES
Appendix 1. SAMPLE DESIGN AND METHODOLOGY
1. INTRODUCTION
1. The Filipino Report Card on Pro-Poor Services is based on a survey of a
representative sample of 1,200 households in the Philippines implemented by the Social
Weather Stations (SWS). The household (family) serves as the unit of analysis because it
is the basic unit of focus of most development interventions by the government, private
sector and civil society organizations. It is the intended recipient of pro-poor public
services covered in the survey. It is the household that makes decisions, often
collectively by its members, to access public and/or private services, weighing the
benefits and costs (both monetary and non-monetary) accompanying each.
2. The respondents to the survey are household heads and/or co-decision makers.
Since the questionnaire consisting of seven separate modules was rather lengthy, each
household had the option to have up to two respondents, so as to ease the response effort
on each. The choice of who would respond to a specific module was left up to the
household head, in consultation with the co-decision maker.
2. SAMPLE SIZE
3. The survey had 1,200 household interviews, the maximum feasible under the
budget. A sample size of about 1,000 is standard in similar social surveys and opinion
polls in a number of countries (e.g., the EuroBarometer surveys - see Annex A). Over the
past 15 years, the sample size of 1,200 has been used regularly by the SWS in national
surveys for quarterly Social Weather Reports, which monitored the Philippine economic,
social and political conditions, and captured public opinion and assessments on
contemporary issues (see Annex B). The success of the SWS surveys in making electoral
predictions, which were virtually the same as the full election counts, demonstrated the
confidence in the survey predictions. Also, it satisfies the global litmus test of sampling
quality and survey methodology.
3. GEOGRAPHIC DISTRIBUTION OF THE SAMPLE
4. The survey covered the entire country divided into four major areas (regions) -
the National Capital Region (NCR), the Island of Luzon excluding NCR (or Balance
Luzon), Visayas and Mindanao. The sample of 1,200 households is allocated among the
four areas in proportion to the estimated number of households (in the year 2000) in each
study area. The latter was obtained by dividing the latest-available' population estimates
' Fieldwork of the NSO 2000 census had not yet begun at the time of sample design and allocation.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 146
of the National Statistical Organization (NSO) for 2000 by the average household size
per the NSO 1995 census (refer to Annex C for detailed computations).2
5. A multi-stage probability sampling, which is standard in similar surveys in both
developed and some developing countries, was used in the selection of sample spots. The
allocation of sample units at each stage is given in Table 1.
Table 1: Sample Allocation
Sample Sample Sample Sample
Region Provinces Municipalities Spots Households
NCR 17 353 174
Balance Luzon 10 15 101 505
Visayas 5 15 494 243
Mindanao 5 15 564 278
Total 20 62 613 1200
6. The sample selection process followed in each of the four major regions is
described in the following:
National Capital Region (NCR)
7. NCR Stage 1. Selection of Sample Precincts. For NCR's first stage, 35
precincts were distributed among the 17 NCR cities and municipalities in such a way that
each city/municipality was assigned a number of precincts that was roughly proportional
to its population size. An additional provision was that each municipality must receive at
least one precinct. Precincts were then selected at random from within each municipality
with probability proportional to population size.
8. NCR Stage 2. Selection of Sample Households. In each sample precinct,
interval sampling is used to draw 5 sample households. A starting street corner is drawn
at random on the precinct map. The first sample household is randomly selected as the
household nearest to the starting street corner. Subsequent sample households were
chosen using a fixed interval of 6 households in between the sampled ones; i.e., every 7th
household was sampled. For each sample household, the household head/decision-maker
was asked questions pertaining to the household. In the event that there is a co-decision-
maker in the household, then that person was asked questions pertaining to certain
aspects of the entire household.
2 Further disaggregation of the four areas (e.g., into provinces) may considerably reduce the number of
sample households per disaggregated unit (province) given the overall sample size of 1,200
3 Five respondents were interviewed per spot in 34 spots yielding 170 respondents, and only four
respondents were interviewed in the next spot to get the total of 174 respondents. The spot with four (4)
respondents was selected at random.
4 Only three respondents were interviewed in one of the spots, which was selected at random.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 147
Balance Luzon, Visayas and Mindanao
9. Stage 1. Selection of Sample Provinces. For the other three regions, the
provinces serve as the first stage unit. The provinces were selected from each study area
with probability proportional to population size, and without replacement in all but one
case.5 The number of provinces in each of the three areas was: Balance Luzon - 10
provinces, Visayas - 5 provinces, and Mindanao - 5 provinces.
10. Stage 2. Selection of Sample Municipalities. Within each of the three study
areas, 15 municipalities were distributed among the sample provinces, with each sample
province assigned a number of municipalities roughly proportional to its population size.
However, it was stipulated that each sample province must receive at least one
municipality. Sample municipalities were then selected from within each sample
province with probability proportional to population size, without replacement, albeit
with three exceptions.6
11. Stage 3. Selection of Sample Spots. Once the sample municipalities have been
selected, the sample spots were distributed among the sample municipalities with the
number of spots roughly proportional to the population in the municipalities. In addition,
it was stipulated that each sample municipality must receive at least one spot. If,
according to NSO classification, the selected sample municipality/city was 100% urban
in 1990 (latest census available), then the sample precincts were drawn systematically
from this municipality/city. For rural municipalities, sample barangays within each
sample municipality were selected with equal probabilities.
12. In an effort to update the urban-rural classification of barangays, the survey
adopted a classification scheme slightly different from the official NSO definition. The
interviewers were instructed to ascertain the urban status of a barangay based on (the
existence of) the following criteria:
A. street patterns, i.e. network of streets in either parallel or perpendicular
orientation;
B. at least six commercial, manufacturing, recreational and/or personal
services establishments;
5 One of the provinces sampled for Mindanao - Lanao del Sur - was assessed to be a security risk at the
time of the fieldwork and was replaced by Maguindanao (refer to Annex D for the list of sample provinces,
municipalities/cities, and barangays). Selection of the replacement province followed the procedure
identified in Stage 1 above. This is consistent with the practice in the quarterly surveys of the SWS, when
some provinces in Mindanao had to be replaced for security reasons.
6 In the survey, three municipalities were replaced due to security reasons. The first one was Poona
Piagapo, a municipality in Lanao del Norte in Mindanao. The other two - Madamba and Taraca - were
replaced because Lanao del Sur province, a security risk, was replaced in the selection of provinces in
Mindanao (see Stage 1 above on selection of provinces). Replacement of municipalities followed the same
procedure used as in selecting municipalities in Stage 2 above.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 148
C. one or more of the following:
* Town or Barangay hall
Church or Chapel
* Public Plaza or Park
Cemetery
* Market Place
* Public building like school, hospital, health center or library.
13. If the barangay had at least two of the categories (met at least two of the criteria)
listed under A, B or C, then it was classified as urban. Otherwise, the barangay was
categorized as rural.7
14. Stage 4. Selection of Sample Households. In the fourth stage, households were
established by systematic sampling within each sample spot. In urban sample spots
(precincts), a random corner was identified on the precinct map; a random start was
generated; and an interval of seven households was applied. In ascertained urban
barangays without precinct maps, the designated starting point was a school, the barangay
captain's house, a church or chapel, or a barangay or municipal hall. This was the same
as that used in the sample rural barangays. The sampling interval for urban barangays
was seven (i.e., every seventh household from the starting point), while for rural
barangays it was two.
15. Stage 5. Selection of Sample Respondents. In the fifth and final stage of
conducting household interviews, the household head decided on which household
member would be the respondent for each module.
16. If it was not feasible to contact a selected sample household in the first attempt, it
was visited a second time. If the respondents in the household remained unavailable even
after a second attempt, another household with the same characteristics (in terms of
gender of household head, age group, and socio-economic class) as the original
household was (identified and) substituted. The substituted household was drawn from
other households that were outside the covered intervals in the sample barangay or
precinct.
17. A list of the sample provinces, cities/municipalities, and barangays / spots is
provided in Annex D.
4. QUESTIONNAIRE
18. Prior to questionnaire design, workshops were organized at which service
providers from both public and private sectors described the central elements of their
7In the survey, five barangays were replaced because the municipality they belong to was also replaced
(see Stage 2 above on sampling of municipalities). Replacement of barangays followed the same procedure
as that used originally in selecting barangays.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 149
programs, and shared areas where client feedback would assist them in improving
performance.
19. A questionnaire with seven (7) modules was used in the survey. Five of the
modules focused on pro-poor public services in the five areas of (i) health care, (ii)
elementary education, (iii) safe water, (iv) housing, and (v) subsidized rice marketed by
the National Food Authority. These constitute five of the six areas covered by the
government's Lingap Para Sa Mahihirap (Care for the Poor) Program.8 The sixth
module obtained data on the demographic and socio-economic characteristics of the
households, while the seventh elicited information on household expenditures by
incorporating a battery of questions from the Annual Poverty Indicators Survey (APIS).9
20. The questionnaire covered, among others, the aspects of client awareness, access,
and use of pro-poor services provided by the government, private sector and others; total
household expenditures and expenditures on the services; satisfaction overall and with
specific features of the services; and client suggestions on public programns that may
better able to deliver the services to the poor. Also, a short series of questions on client
awareness, use and satisfaction with the Lingap Para sa Mahihirap flagship poverty
alleviation program of the Estrada Admninistration was included at the request of the
government.
21. The questions on awareness ascertained client knowledge about government
programs in the five sectors and the Lingap Program. They also collected information on
the sources of informnation for the clients on public programns. The access questions
focused on ease of access physically (e.g., within a 15-minute walk from home) and other
dimensions such as waiting time and availability of personnel and supplies at the service
facilities. The queries on use covered multiple uses of different service facilities, as well
as main facility used by the household. In addition, non-users were asked their reasons
for opting out. The expenditure module (from the APIS) captured the total household
expenditure, while the questions in the sector modules collected both quantities
consumed and expenditures incurred on various items in the sector.
22. Client assessment of satisfaction was ascertained for the service in each sector
overall by category/subcategory of service provider (e.g., public, private and other'0) as
well as other key classification of service providers,'" and by their specific characteristics
such as physical access, adequacy of facilities and equipment, availability of supplies,
costs/fees/prices charged, and competence, availability and attitude of personnel. The
responses on satisfaction were captured on a structured scale ranging from very satisfied,
8Livelihood development through micro credit is the sixth area covered under the Lin gap Para sa
Mahihi rap Program.
9A unique feature of the Filipino Report Card is that it includes the expenditure module from the APIS.
This help to link together the quantitative poverty information from the expenditure module of the APIS
with client feedback on pro-poor services.
10For example, traditional healer in the health module.
" For examiple, level I, II and III systems in the case of the drinking water module; and primary, secondary
and tertiary facilities in the case of the health module.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 150
somewhat satisfied, undecided whether satisfied or not, somewhat dissatisfied, and very
dissatisfied.
23. It is common practice in such surveys to capture responses on a structured scale to
facilitate compilation of overall scores by category/sub-category and by characteristic.
Two types of aggregation are used by the SWS in past surveys. The first is a net
satisfaction percentage arrived at by subtracting the percentage of households that are
somewhat dissatisfied and very dissatisfied from that of households that are somewhat
satisfied and very satisfied. The net satisfaction percentage ranges from minus 100% (all
households either somewhat dissatisfied or very dissatisfied) to plus 1 00% (all
households either somewhat satisfied or very satisfied). The second is a weighted index,
with the responses weighted as follows: very satisfied - weight of 5, somewhat satisfied -
weight of 4, undecided whether satisfied or not - weight of 3, somewhat dissatisfied -
weight of 2, and very dissatisfied - weight of 1. The value of the index ranges from 1 (all
households very dissatisfied), a middle value of 3,12 to 5 (all households very satisfied).
24. The advantage of the net satisfaction percentage is that it is simple. But, by
assigning equal weights, it fails to distinguish between the degrees of
satisfaction/dissatisfaction. On the other hand, the weighting adopted in the second scale
does distinguish the variations in the degree of satisfaction and dissatisfaction. However,
the weighting scheme mentioned above biases the value of the index towards the high
end of the range and thus is likely to present a more favorable picture. In order to
minimize the biases, the Report Card modified the weights used in aggregating the
responses into net satisfaction scores along the following lines: very satisfied accorded a
weight of plus two (2), somewhat satisfied plus one (1), undecided zero (0), somewhat
dissatisfied minus one (-1), and very dissatisfied minus two (-2). The value of the
resulting net satisfaction score ranges from a high of plus two (2), or all households very
satisfied; a median of zero (0);13 to a low of minus two (-2), or all households very
dissatisfied.
25. To elicit client suggestions on programs that could better serve (deliver the
services to) the poor, the questions included those with structured responses on programs
that were either being implemented14 or under consideration/discussion at the time, 5 as
well as open-ended ones, which relied entirely on client suggestions. In a few cases, they
included follow-up queries on whether the suggested programs could be implemented
with much, some or no corruption.
26. The first drafts of the survey questionnaire went through several iterations
following consultations with World Bank staff and in-country experts, including those
from the civil society. The primary questionnaire was originally drafted in both Tagalog
(the definitive language) and English. The questionnaire was translated into the regional
languages - Cebuano, Ilonggo, Ilocano, and Bikol - by one group of translators, and then
12 An index value of 3 could be generated by multiple combinations.
3 A net satisfaction score of zero could emerge from several combinations.
14 For example, the Health Sector Reform Agenda of the Department of Health.
'5 For example, the proposed Low-Priced Rice Distribution Pilot Program of the National Food Authority.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 151
retranslated back to Tagalog by a second group, to ensure that the primary messages were
conveyed accurately in the non-Tagalog versions.
5. SURVEY EXECUTION
Training of Enumerators
27. Training of the survey personnel was conducted in three central locations:
Manila, Iloilo City and Cebu City. The personnel that would cover NCR and Balance
Luzon were trained in Manila. The training in Iloilo City covered the survey personnel
assigned to Ilonggo-speaking regions, while that in Cebu City covered the personnel
allocated to cover Cebuano-speaking areas, including Central and Eastern Visayas and
Mindanao. The minimum training time for group supervisors and interviewers was one
week. The training activities mainly consisted of: (i) one or two days of classroom
instruction on the basics of the project; (ii) mock interviews with co-workers to
familiarize with the flow of interviewing and questionnaire format; and, (iii) practice
interviews with a supervisor in attendance, until the interviewers could be left on their
own,16
Recruitment of Personnel
28. The SWS has been conducting national surveys for almost 15 years and had
trained interviewers all over the country. Most of the enumerators for this survey were
drawn from this pool of experienced interviewers. A few interviewers were newly hired
and underwent a thorough training program and supervision before they were allowed to
proceed on their own.
Fieldwork Dates
29. Field canvassing of the survey was carried out from March 26 to April 17, 2000.
The fieldwork dates for each of the major areas are as follows:
National Capital Region: March 26 - April 3, 2000
Balance Luzon: April 2 - 15, 2000
Visayas: March 31 - April 15, 2000
Mindanao: April 2 - 17, 2000
Monitoring and Supervision
30. Supervisors reporting to the Field Manager (a regular staff of SWS) of the survey
monitored the conduct of the fieldwork (interviews) fuill-time. They observed
16 All the interviewers were women, which is also the case in virtually all the surveys conducted by the
sws.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 152
interviewers at work,17 followed-up on their activities, and made surprise checks on the
field interviewers. They also ensured that field logistics were in order.
31. The fieldwork guidelines called for spot-checking at three stages. The first one
took place after about 30% of the interviews were completed. The second spot-checking
was conducted after 60% completion, and the third was undertaken immediately after
completing the canvassing of 90% of the households.
32. During spot-checking, at least 20% of the unsupervised interviews were
re-interviewed/back-checked. If serious errors persisted after the 20% spot-checking, the
original interview results were discarded and the respondents were re-interviewed. An
error was considered serious if dishonesty in recording was apparent or if there was a
serious misinterpretation of the scope and objectives of the study questionnaire that led to
the compilation of wrong information. Re-interviews were done in a few cases of
misinterpretation of the questionnaire. No cases of dishonesty in recording were
encountered.
33. If the responses to some questions were found to be incomplete or found to be
logically inconsistent, the interviewer was required to return to the respondent and obtain
responses to the said questions and complete a corrected record.
Field Editing
34. After each interview, the interviewer was required to go over the recorded
responses and check for consistency. All accomplished interview schedules were
submitted to the assigned group supervisor who, in turn, scrutinized and edited the
interview records.
Data Coding and Processing
35. An officer at the SWS headquarters in Manila conducted a final consistency check
on all interview records (sheets). Interview sheets were edited/checked twice by other
officers (editors) before the data were encoded and recorded on diskettes. A data entry
computer program verified and checked the consistency of the encoded data before the
preliminary data tables were generated. Information on households generated from the
preliminary tables and subsequent analyses are discussed in the next section.
6. HOUSEHOLD CHARACTERISTICS
36. The characteristics included household composition (number and gender of
household members), gender, age, civil status, educational attainment and occupation of
household head, and membership in associations. In addition, information was obtained
on use of facilities/services and appliances possessed by the household. The gender of
respondents for each of the questionnaire modules was also recorded.
1 More than 10% of the interviewers were observed in action by the supervisors.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 153
37. The households in the sample had on average 4.8 members and 49.6% of these
were male.18 Regional variations are modest except in the case of Mindanao, where the
household size is somewhat larger (5.3 members) with males forming the majority
(50.6%). About three-in-one (74%) sample households were headed by men, with NCR
having the lowest proportion (68%) and Mindanao the highest (79%). In other words,
more than one-in-four sample households were headed by females. The pattern of
variation across the four regions is similar to that observed in the 1998 APIS. However,
the proportion of male-headed households in the 1998 APIS is higher (84%), which may
be in part due to the differences in the rural-urban distribution of the sample households
in the two surveys.
38. The vast majority of household heads (97%) were over 25 years old, with 16% in
the age group of 25 to 34 years, 21% each in the succeeding three ten-year categories,
and 18% aged 55 years or more. Less than three-in-four (72%) household heads were
married, 18% widowed, 5% single/never married, 3% divorced and 2% living in as
married. The proportion of households headed by single/never-married persons in NCR
(10%) is twice as large as the national average while it is the lowest in Mindanao (1%).
Also, the proportion of households headed by divorcees is highest (7%) in NCR. The
pattern in NCR may be explained (at least in part) by the wider economic opportunities
available in the region as compared to others and weaker social and religious pressures.
The opposite may be true in Mindanao.
39. Less than one-in-five household heads (19%) had some elementary education; an
equal proportion completed elementary; 13% had some high school education; 18% had
completed high school; 9% had some college education; and 12% completed college.
The educational attainment of household heads in NCR is skewed to the upper end as
compared to that in other regions. The proportions in the Report Card differ from those
in the 1998 APIS and the differences could be explained by the different timings of the
surveys and urban-rural distribution of sample households in the two surveys.
40. Almost half the household heads characterized their occupation as hired workers
(46%), with about a quarter each as self-employed without any employees (27%) or
employer in family operated farm or business (25%). The proportion of hired workers in
the Report Card is identical to that in the 1998 APIS. However, the proportion of self-
employed without any employee in the 1998 APIS is much higher than that in the Report
Card (43% vs. 27%). This may be due to differences in the questions on occupation,
timing and composition of samples in the two surveys.
41. In regard to membership in organizations, about one-in-five households indicated
to be members of church or other religious organizations (21%) and two-in-three were
not members of any organization. Membership in religious organizations is the highest in
Mindanao (37%) and lowest in Visayas (13%). Data from sector modules confirm that
on average, the proportion of household membership in voluntary associations (other than
religious organizations) was around 10%.
18 The average household size in the 1998 Annual Poverty Indicators Survey was 5.0 and 50.7% of these
were male. See NSO 1998 Annual Poverty Indicators Survey.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 154
42. About 90% of the sample households used electricity. The proportion is highest
in NCR and lower in Visayas and Mindanao (83% each). The proportion of households
owning radio/audio cassette averaged at 90%, television 75%, gas stove 63%,
refrigerator/freezer 49% and washing machine 29%. Regional differences are significant
with the proportion of households in Mindanao owning gas stove, refrigerator/freezer and
washing machine averaging at less than half that in NCR.
43. The main formal sources of information on government programs were TV (47%)
followed by radio (32%) with newspapers and other print media coming as a distant third
(13%). Friends and relatives were the dominant informal source of information on the
programs, often exceeding radio in importance (35% vs. 32%). However, TV continued
to be watched by two-in-three respondents and was ranked as the single most important
source of information on government programs.
44. Although the majority of households (74%) were headed by males, the majority
of respondents (between 52% and 80%) were females in six of the seven modules. This
demonstrates the central role of Filipino women in household management and decision-
making. The lone exception was housing where 56% of the respondents were male.
7. URBAN - RURAL DISTRIBUTION OF HOUSEHOLDS
45. About 60% of the sample households were located in areas that were classified as
urban based on objective criteria developed by the SWS. This compares with an almost
equal distribution of sample households in urban and rural areas in the 1998 APIS, which
largely relied on the classification in the 1990 Census. Some of the differences between
the urban-rural distributions of households in the two samples may be due to different
criteria used in classifying urban areas and the rest due to sample composition or
sampling. 19
46. Differences in urban-rural distribution of households are significant. As expected,
100% of sample households in NCR were classified as urban, which was also the case in
the 1998 APIS. Rural households dominated the sample in Mindanao in both the Report
Card (60%) and the 1998 APIS (65%). The major discrepancy in household distribution
between the two surveys was in Visayas (66% urban in Report Card vs. 37% urban in
1998 APIS). This may be largely due to differences in the selection of households in the
two samples.
8. POVERTY CLASSIFICATIONS
47. Data tabulations were undertaken using two poverty classifications in the Report
Card.20 The first is based on self-classification/rating of the status of the households as
'9 The effect of the discrepancy in the urban and rural distribution of households in the sample was tested
by comparing the Report Card results with those obtained by attaching the 1998 APIS urban-rural weights.
In the large majority of cases, the differences between the weighted and unweighted results were not
significant.
20 A third poverty classification of households into A, B, C, D, and E based on the enumerator's
observation and assessment of the housing and living conditions of the households is used by the SWS [A -
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 155
poor, borderline and not-poor by the respondents. This is a bottom-up assessment of the
status of the household by the respondent(s) in the household.2t Their ratings incorporate
not only income/expenditure but also myriad other socioeconomic factors that influence
the welfare of the household. The self-rated poverty (SRP) concept has been in use by
the SWS for the past 15 years in its quarterly surveys. It was found to be a valuable
independent instrument to capture people's assessment of their own status/well-being.
48. About 60% of the sample households rated themselves to be SRP poor, 28% as
SRP borderline and 12% as not-poor.22 Regional differences are significant with NCR
having the lowest proportion of SRP poor (40%) and the highest proportions of
borderline (35%) and not poor (25%). About 70% of the households in Visayas and 69%
in Mindanao ranked themselves to be SRP poor. The proportion of not-poor households
is lowest in Mindanao (3°%) with that in Visayas at 8%. The proportion of SRP poor was
marginally higher among male-headed households as compared to that for female-headed
households (61% vs. 57%). Urban households had a lower proportion of SRP poor
compared to their rural counterparts (53% vs. 71%). The poverty incidence trends are
consistent with official poverty estimates based on household expenditure, although the
SRP proportions are almost twice as large as official estimates.
23
49. The second poverty classification is based on household expenditure.
Households with expenditures in the bottom three expenditure deciles (bottom 30%) were
classified as poor; those with expenditures in the fourth to sixth deciles (middle 30%)
were classified as middle-income; and those with expenditures falling in the top four
expenditure deciles (top 40%) were classified as rich.24 Two factors influenced the
poverty classification based on expenditures along the above lines. First, the incidence of
(expenditure) poverty in the Philippines was about 30% according to official estimates.25
So, households with expenditures falling in the bottom 30% should cover virtually all, if
not all, the households that are below the official poverty line and are therefore
considered to be expenditure poor by official definition. Second, the median self-rated
the rich, B - the upper-class, C - the middle-class, D - the mass-class, and E - the very poor]. This has been
a particularly useful instrument for market research and targeting of goods and services, indigenous to the
Philippines business community. This ABCDE poverty classification was also included in the survey
questionnaire.
2i It is worth reiterating that the poor know their situation best - they are considered the experts on poverty
by many non-economist social scientists.
22 The proportion of households rating themselves to be poor (self-rated poverty) fluctuated around 60%
between February 1998 and April 2000 (range of 57% to 65%). It showed a decline in the following three
quarters (range of 54% to 57%).
23 Some characterize the expenditure poverty classification to be a top-down and partial approach to
measuring poverty as the parameters are limited in coverage, mainly money-metric, and determined by
outside national and international experts, based on their criteria.
24 An altermative labeling of the groups was suggested by the SWS: households in the bottom three
expenditure deciles (or bottom 30%) to be labeled very poor, in middle 30% as somewhat poor, and those
in top 40% middle-income and rich. This would conform more closely to the SWS self-rated poverty
classifications. A further variation may also be considered: bottom 30% - poor, middle 30% - low-income,
and top 40% - middle-income and rich.
25 Estimates of poverty incidence in the Philippines Poverty Assessment are lower at around 25%. Informal
discussions with the NSO indicated that poverty incidence may have likely gone up.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 156
poverty threshold of the SRP poor was virtually the same as the official poverty line,26
based on household expenditure from 1985 to 1997.27 Thus, the expenditure poor
(bottom 30%) should overlap with the bottom half of the SRP poor.28 In fact, more than
80% of the expenditure poor households covered in the Report Card survey do overlap
with the bottom half of the SRP poor households. Further, the expenditure poor and
middle-income households (with expenditures falling in the bottom six expenditure
deciles or bottom 60%) should overlap with the self-rated poor as the latter also account
for 60% of the households.
50. Thus, self-rated poverty and expenditure poverty appear to be directly, and
closely, inter-related. To this end, the expenditure poverty classification is adopted in the
Report Card as the primary poverty classification.2 This is considered appropriate in this
first pilot phase of the Report Card with refinements to follow in subsequent rounds.30
9. DATA ANALYSES
51. Preliminary results based on initial tabulations were presented to representatives
of service providers and other stakeholders in Manila, Clark and Cebu in four workshops
during June 2000. The workshop participants confirmed the validity of many of the
results and suggested a number of areas for further analysis. Detailed analyses of the
survey responses are carried out taking into account the suggestions of the stakeholder
representatives. The responses are analyzed by geographic area (aggregate RP, NCR,
Balance Luzon, Visayas and Mindanao), urban/rural location, and one measure of
poverty status of the household - based on the expenditure poverty classification
described in the preceding sections. The results are discussed in the text Chapters II to
VII.
52. It is recognized that no single sample of 1200 households, no matter how
carefully selected, can fully represent a population as large and diverse as that of the
Philippines. Nevertheless, the Report Card does provide a snapshot of the views of a wide
spectrum of Filipinos on pro-poor services they are receiving, based on their experience.
The client assessments have been collected by means of sound and well-tested survey
techniques. The results are subjected to rigorous standard error analysis, which shows
that most of the findings included in the sector and program chapters are significant.31
26 Defined by the National Statistical Coordination Board.
27 1985 is the first year for which the SWS data are available and 1997 is the last year for which official
poverty line data are available.
28 The SRP poor account for 60% of the households.
29 To facilitate comparison and cross-checking for consistency between the results under the two poverty
classifications.
30 For example, the expenditure poverty classification could be refined by using regional/provincial poverty
lines.
31 The major sector tables with the standard errors can be obtained from the Report Card team by interested
readers.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 157
Annex A. Sample Sizes in EuroBarometer Surveys, 1997
Country Survey Organization Sample Size Fieldwork Dates Population Aged 15+
(in '000)
Belgium INRA Belgium 1,041 20/10 - 03/11 8,356
Denmark GFK Danmark 1,000 15/10 - 11/11 4,087
Germany (E)* INRA Deutschland 1,036 12/10 - 04/11 13,608
Germany (W)* INRA Deutschland 1,026 12/10 - 04/11 52,083
Greece KEME 1,012 13/10 - 12/11 7,474
Spain INRA Espafia 1,000 22/10 - 03/11 28,075
France TMO Consultants 1,005 20/10 - 03/11 43,590
Ireland LANSDOWNE Market 1,002 20/10 - 12/11 2,549
Research
Italy PRAGMA 1,011 20/10 - 31/10 44,495
Luxembourg ILReS 620 14/10 - 10/11 372
Netherlands NIPO 1,003 17/10 - 15/11 11,232
Austria SPECTRA 1,023 17/10 - 03/11 6,004
Portugal METRIS 1,000 18/10 - 05/11 7,338
Finland MARK Development 1,032 20/10 - 11/11 4,017
Center
Sweden TEMO 1,000 20/10 - 16/11 7,808
Great Britain INRA UK 1,064 13/10 - 10/11 44,225
Northem Ireland ULSTER Marketing 311 23/10 - 10/11 1,159
Surveys
* In Germany, the EuroBarometer surveys prior to unification pertained only to the Western portion. After unification,
a number of German surveys, including EuroBarometer, have taken separate samples for the Western and Eastern
portions, so as to continue the time series of the Western section, while allowing for aggregation to the unified national
level.
Source: EuroBarometer
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 158
Annex B. Sample Sizes in Past SWS Surveys
Year Project No. Date Location Respondents Sample Size
1984 4-84 Apr 1984 RP Adults 2,000
1985 6-85 Jul 1985 RP Adults 2,000
9-85 Sep 1985 RP Adults 8,163
1986 5-86 May 1986 RP Adults 2,000
10-86 Oct 1986 RP Adults 1,200
1987 3-87 Mar 1987 RP Adults 1,200
9-87 Sep 1987 GMA Adults 500
10-87 Oct 1987 RP Adults 1,200
1988 3-88 Mar 1988 GMA Adults 300
9-88 Sep 1988 RP Adults 1,200
1989 2-89 Feb 1989 RP Adults 1,200
6-89 Jul 1989 GMA Adults 300
9-89 Sep 1989 RP Adults 1,200
12-89 Dec 1989 GMA Adults 500
1990 4-90 Apr 1990 RP Adults 1,200
8-90 Aug 1990 GMA Adults 300
11-90 Nov 1990 RP Adults 1,200
1991 3-91 Mar 1991 GMA Adults 300
7-91 Jul 1991 RP Adults-I 1,200
7-91 Jul 1991 RP Adults-2 1,200
9-91 Sep 1991 GMA Adults 300
11-91 Nov 1991 RP Adults-I 1,200
11-91 Nov 1991 RP Adults-2 1,200
1992 2-92 Feb 1992 RP Adults 1,200
4-92 Apr 1992 RP Adults 1,200
5-92 May 1992 RP Adults 1,200
9-92 Sep 1992 RP Adults 1,200
12-92 Dec 1992 RP Adults-I 1,200
12-92 Dec 1992 RP Adults-2 1,200
1993 4-93 Apr 1993 RP Adults- I 1,200
4-93 Apr 1993 RP Adults-2 1,200
7-93 Jul 1993 RP Adults 1,200
9-93 Sep 1993 RP Adults 1,200
12-93 Dec 1993 RP Adults-I 1,200
12-93 Dec 1993 RP Adults-I 1,200
1994 4-94 Apr 1994 RP Adults 1,260
8-94 Aug 1994 RP Adults 1,260
11-94 Nov 1994 RP Adults- I 1,200
11-94 Nov 1994 RP Adults-2 1,200
12-94 Dec 1994 RP Adults-I 1,200
12-94 Dec 1994 RP Adults-2 1,200
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 159
Annex B. Sample Sizes in Past SWS Surveys (contd)
Year Project No. Date Location Respondents Sample Size
1995 95-1 (FEB) Mar-Apr 95 RP Adults-1 1,200
95-1 (FEB) Mar-Apr 95 RP Adults-2 1,200
95-11 (JFEN) Jun 1995 RP Adults-I 1,200
95-11 (JUN) Jun 1995 RP Adults-2 1,200
95-I11 (OCT) Oct 1995 RP Adults-i 1,200
95-1l1 (OCT) Oct 1995 RP Adults-2 1,200
95-IV (DEC) Dec 1995 RP Adults-i 1,200
95-IV (DEC) Dec 1995 RP Adults-2 1,200
1996 96-1 (APR) April 1996 RP Adults-i 1,200
96-1 (APR) April 1996 RP Adults-2 1,200
96-11 (JUN) June 1996 RP Adults-i 1,200
96-11 (JUN) June 1996 RP Adults-2 1,200
96-111 (SEP) Sept 1996 RP Adults-I 1,200
96-III (SEP) Sept 1996 RP Adults-2 1,200
96-111 (SEP) Sept 1996 RP Adults-3 1,200
96-IV (DEC) Dec 1996 RP Adults-I 1,200
96-IV (DEC) Dec 1996 RP Adults-2 1,200
1997 97-1 (APR) Mar-Apr 1997 RP Adults-I 1,200
97-1 (APR) Mar-Apr 1997 RP Adults-2 1,200
97-1 (JUN) Jun-Jul 1997 RP Adults-i 1,200
97-11 (JUN) Jun-Jul 1997 RP Adults-2 1,200
97-111 (SEP) Aug25-Sepl8 97 RP Adults-i 1,500
97-111 (SEP) Aug25-Sep8 '97 RP Adults-2 1,200
97-111 (SEP) Aug25-Sepl8 '97 RP Adults-3 1,200
97-IV (DEC) Nov 21-Dec 19'97 RP Adults-i 1,500
97-IV (DEC) Nov 21-Dec 19 '97 RP Adults-2 1,200
97-IV (DEC) Nov 21-Dec 19 '97 RP Adults-3 1200
1998 98-I (Feb) Feb-Mar, 1998 RP Adults-I 1500
98-1 (Feb) Feb-Mar, 1998 RP Adults-2 1200
98-1 (Feb) Feb-Mar, 1998 RP Adults-3 1200
98-11 Apr 8,12-16, 1998 RP Adults-i 1500
98-11 June 27 - July 14, RP Adults-2
1998 1200
98-11 June 27 - July 14, RP Adults-3
1998 1200
98-111 Sep 11-26, 1998 RP Adults-i 1200
98-111 Sep 16-26, 1998 RP Adults-2 1200
98-IV Oct 25-Nov 14, 1998 RP Adults- I 1200
98-IV Nov 5-Nov 13, 1998 RP Adults-2 1200
1999 99-1 Mar 1-19, 1999 RP Adults-I 1200
99-11 Jun 2-16, 1999 RP Adults-I 1200
99-111 Sep 25-Oct II, 1999 RP Adults-I 1200
99-111 Sep 25-Oct 11, 1999 RP Adults-2 1200
99-IV Nov 27-Dec 15, 1999 RP Adults-i 1200
99-IV Nov 27-Dec 15, 1999 RP Adults-2 1200
2000 2000-I Mar 4-22, 2000 RP Adults-I 1200
12000-1 Mar 4-22, 2000 RP Adults-2 1200
RP - Republic of the Philippines GMA - Greater Manila Area
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 160
Annex C. Geographic Distribution of Sample Households
Item RP NCR Balance Visayas Mindanao
Luzon
1995 Population (NSO) 68,431,213 9,411,697 28,734,885 14,119,660 16,164,971
1995 Household Number (NSO)
13,508,055 1,985,299 5,667,626 2,760,829 3,094,301
1995 Average Household Size (NSO)
5.07 4.74 5.07 5.11 5.22
2000 Population
(NSO estimate) 76,348,149 10,387,991 32,141,622 15,619,118 18,199,418
Estimated Number of Households in 2000'
15,071,749 2,191,238 6,339,566 3,054,019 3,483,735
Proportion of Households' 100.00% 14.54% 42.06% 20.26% 23.11%
Distribution of Sample Households3
1,200 174 505 243 277
Note: The number of households in 2000 is derived by dividing the estimated population in 2000 by the average
household size in 1995. The proportion of households in each area (e.g., NCR) is derived by dividing the number of
households in 2000 in the area by the total number of households in 2000. Distribution of sample households by area
was determined by multiplying the total number of sample households (1,200) by the proportion of households in each
area.
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 161
Annex D. Distribution of Sample Provinces, Cities/Municipalities and Precincts/Barangays
NATIONAL CAPITAL REGION (17 Cities/Municipalities, 35 Spots, and 174 respondents)
No. of Sample Precincts
City/ Municipality (all urban)/Spots Interviewed 5 respondents in each spot
1. MANILA 4
2. CITY OF MANDALUYONG I
Interviewed 4 respondents only in one of the spots to get total
3. MARIKINA 2 of 174 respondents.
4. CITY OF PASIG 2
5. QUEZON CITY 5
6. SAN JUAN I
7. KALOOKAN CITY 3
8. MALABON I
9. NAVOTAS I
10. VALENZUELA 2
l l JLAS PINAS 2
12. CITY OF MAKATI 2
13. CITY OF MUNTINLUPA 2
14. PARANAQUE 2
15. PASAY CITY 2
16. PATEROS I
17. TAGIG 2
BALANCE LUZON (10 Provinces, 15 Cities or Municipalities, 101 Precincts/Barangays (Spots), and
505 Respondents)
1990 NSO
Province/City/Municipality Barangay/Spot Locale Interviewed 5 respondents in each spot
[LOCOS NORTE Province
MARCOS (2) Escoda RURAL
Tabucbuc (Ragas) RURAL
PANGASINAN Province
CALASIAO (8) 8 Precincts URBAN
TAYUG (4) Carriedo RURAL
Legaspi RURAL
Libertad RURAL
Zamora RURAL
CAGAYAN Province
BUGUEY (4) Balza RURAL
Centro (Pob.) URBAN
Centro West RURAL
Remebella RURAL
BATAAN Province Masantol URBAN
ORANI (6) Centro I (Pob.) URBAN
Sibul RURAL
Tapulao RURAL
Tenejero (Pob.) URBAN
Apollo URBAN
NUEVA ECIJA Province
CABANATUAN CITY (22) Bagong Sikat RURAL
Bitas URBAN
Bonifacio District (Pob.) URBAN
Campo Tinio RURAL
Kapitan Pepe (Pob.) URBAN
Cinco-Cinco RURAL
City Supermarket (Pob.) URBAN
Cruz Roja RURAL
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 162
1990 NSO
Province/City/Municipality Barangay/Spot Locale Interviewed 5 respondents in each spot
Dimasalang (Pob.) URBAN
Isla (Pob.) URBAN
M. S. Garcia URBAN
Pagas RURAL
Pamaldan RURAL
Pula RURAL
San Isidro RURAL
Santa Arcadia RURAL
Vijandre District (Pob.) URBAN
Villa Ofelia-Caridad URBAN
Aduas Sur URBAN
Sumacab Este RURAL
Sumacab South NONE
Santo Nifio NONE
SAN ANTONIO (7) Cama Juan RURAL
Julo RURAL
Panabingan RURAL
Papaya RURAL
Poblacion URBAN
San Mariano RURAL
Santa Barbara RURAL
TARLAC Province
SAN MANUEL (3) Legaspi RURAL
San Miguel URBAN
San Vicente RURAL
BATANGAS Province
LEMERY (7) Ayao-iyao RURAL
Bukal RURAL
Mahayahay RURAL
Matingain 11 RURAL
Tubuan RURAL
Wawa Ilaya URBAN
Sinisian West RURAL
LIAN (5) Balibago RURAL
Bungahan RURAL
Luyahan RURAL
Barangay 3 (Pob.) URBAN
Barangay 4 (Pob.) URBAN
LAGUNA Province
BAY (5) Masaya RURAL
Santo Domingo RURAL
Tagumpay RURAL
San Agustin (Pob.) URBAN
San Nicolas (Pob.) URBAN
B[NAN (17) 17 Precincts URBAN
ALBAY Province
SANTO DOMINGO (LIBOG) Santo Domingo Pob.
(4) (Bgy. 4) URBAN
San Pedro Pob. (Bgy. 5) URBAN
San Rafael Pob. (Bgy. 7) URBAN
San Andres RURAL
TIWI (5) Belen (Malabog) RURAL
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 163
1990 NSO
Province/City/Municipality Barangay/Spot Locale Interviewed 5 respondents in each spot
Coro-coro RURAL
Dap-dap RURAL
Joroan RURAL
Putsan RURAL
CATANDUANES Province
BAGAMANOC (2) Bugao RURAL
Salvacion (Panuto) RURAL
VISAYAS (5 Provinces, 15 Cities or Municipalities, 49 Precincts/Barangays (Spots), and 243
Respondents)
NEGROS OCCIDENTAL
Province
BACOLOD CITY (Capital) 9 Precincts URBAN
HIMAMAYLAN Cabadiangan RURAL
Libacao RURAL
LA CARLOTA CITY Consuelo URBAN
Barangay III (Pob.) URBAN
SAN CARLOS CITY Buluangan RURAL
Guadalupe URBAN
Barangay V (Pob.) URBAN
BOHOL Province
BALILIHAN Maslog RURAL
PANGLAO Doljo URBAN
CEBU Province
BORBON Bingay RURAL
Don Gregorio Antigua
(Taytayan) RURAL
CEBU CITY (Capital) 14 Precincts URBAN
SAMBOAN San Sebastian RURAL
TOLEDO CITY Cabitoonan RURAL
Poog RURAL
Sam-ang RURAL
Talavera RURAL
TUBURAN Siotes RURAL
Barangay III (Pob.) URBAN
NEGROS ORIENTAL
Province
CANLAON CITY Bayog RURAL
Malaiba RURAL
Interviewed 3 respondents only in this spot to
GUIHULNGAN Banwaque RURAL make up total of 243 respondents
Humayhumay RURAL
Kagawasan RURAL
SOUTHERN LEYTE
Province
MACROHON Santa Cruz (Pob.) URBAN
MALITBOG San Roque RURAL
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 164
Province/City/Municipality Barangay/Spot 1990 NSO Interviewed 5 respondents in each spot
Locale
MINDANAO (5 Provinces, 15 Cities/Municipalities, 56 Precincts/Barangays (Spots), and 278
Respondents)
BUKIDNON Province
BAUNGON Mabunga RURAL
Nicdao URBAN
KADINGILAN Husayan RURAL
Kibalagon RURAL
MALAYBALAY (Capital) Cabangahan RURAL
Imbayao RURAL
Barangay 9 (Pob.) URBAN
Barangay 11 (Pob.) URBAN
Simaya RURAL
QUEZON Cebole RURAL
Magsaysay RURAL
Mibantang RURAL
Poblacion (Kiokong) URBAN
SOUTH COTABATO
Province
GENERAL SANTOS CITY
(DADIANGAS) Conel URBAN
Dadiangas East (Pob.) URBAN
Katangawan RURAL
San Isidro (Lagao 2nd) URBAN
Tambler URBAN
Apopong RURAL
Siguel RURAL
Batomelong None
Dadiangas North URBAN
Dadiangas South URBAN
Fatima None
Olympog None
KORONADAL (Capital) Mabini RURAL
Mambucal RURAL
San Isidro RURAL
Santo Nino (Bo. 2) URBAN
Zone III (Pob.) URBAN
NORALA Kibid RURAL
San Miguel RURAL
SANTO NINO Ambalgan RURAL
Manuel Roxas RURAL
LANAO DEL NORTE
Province
ILIGAN CITY Dalipuga RURAL
Hinaplanon RURAL
Santa Filomena RURAL
Bagong Silang RURAL
Dulag RURAL
San Miguel URBAN
Tibanga RURAL
Panoroganan None
San Roque None
Villa Verde None
Filipino Report Card on Pro-Poor Services
Appendix 1. Sample Design and Methodology 165
Province/City/Municipality | Barangay/Spot 1990 NSO Interviewed 5 respondents in each spot
Locale
POONA PIAGAPO (MUNICIPALITY NOT PENETRABLE)
Madamba RURAL
Tagoranao RURAL
TUBOD (Capital) Patudan RURAL
Taguranao RURAL
LANAO DEL SUR Province (PROVINCE NOT PENETRABLE)
Interview 3 respondents only to make up the
MADAMBA URBAN total of 278 respondents
TARAKA Datu Ma-as URBAN
Lumbac Bagoaingud RURAL
TAWI-TAWI Province
BONGAO (Capita]) Bongao Poblacion URBAN
Ungus-ungus RURAL
Pag-asa RURAL
SITANGKAI Datu Amilhamja Jaafar URBAN
Sheik Makdum RURAL
REPLACEMENT SPOTS IN MINDANAO
LANAO DEL NORTE
Province l
BAROY (REPLACEMENT FOR POONA PIAGAPO)
Interviewed 3 respondents only to make up
Andil RURAL the total of 278 respondents
Libertad RURAL
MAGUINDANAO Province (REPLACEMENT FOR LANAO DEL SUR Province)
BULUAN Kayaga RURAL
PAGALUNGAN Dungguan RURAL
Kudal RURAL
BIBLIOGRAPHY
Asian Development Bank. 1997. "Second Water Utilities Data Book," edited by
Arthur C. McIntosh and Cesar E. Yniquez, October.
. 1998. "Philippines Health Situationer, 1998." ADB Compendium of
Health Statistics in the Philippines
_. 1999. "Urban Sector Profile: Philippines," Manila.
____ and World Bank. 1999. "Philippine Education for the 21't Century." The
1998 Philippines Education Sector Study. Manila.
Avritzer, L. 2000. "Public Deliberation at the Local Level: Participatory
Budgeting in Brazil, " Paper Delivered at the Experiments for Deliberative
Democracy Conference, Wisconsin, January.
Arroyo, Dennis. 1999. "Self-Rated Poverty and Poverty Thresholds." Social
Weather Bulletin 89-3, February.
Baiocchi, G. 1999. "Participation, Activism and Politics: The Porto Alegre
Experiment and Deliberative Democratic Theory," University of Wisconsin,
November.
Balisacan, Arsenio M., et. al 1994, "Targeting Subsidies to the Poor: The Case of
Food Subsidies". Journal of Philippine Development, 1't and 2nd Semester.
.2000. "Approaches to Targeting the Poor," Final Report preparedfor
NEDA in support of the UNDP-Assisted Project on Strengthening Institutional
Mechanisms for Convergence of Poverty Alleviation Efforts, Manila, 10 March.
Bhatt, Mihir R. 1995. "Budget Analysis and Policy Priority: DISHA's
Experience," Foundation for Public Interest, Ahmedabad, October.
. 1997. Performance Review Rating: Urban Management Tool. "Report
Card of Poor Self-Employed Women on Public Services in Ahmedabad,"
Presentation to City Leaders and Municipal Officials of Rajkot, Gujarat, May 6
and 7.
Blunt, Alistair and Paul Strassmann. 1993. "Land, Income, Mobility and Housing:
The Case of Metro Manila." Journal of Philippine Development, Volume 20,
No.1.
Brinkerhoff, D. and A. Goldsmith. 2000. "Participation in Macroeconomic Policy:
Experience and Implications for Poverty Reduction Strategies," Draft, The
World Bank, October.
Filipino Report Card on Pro-Poor Services 167
Bibliography
Chambers, R. 1997. "Whose Reality Counts? Putting the First Last," London:
Intermediate Technology Publications.
Clarete, Ramon, et. al. 1998. "Philippine Grains Sector Development Program
Project," Paper submitted to the Asian Development Bank, January.
and Irene Villapando. 2000. "Strategic Reorganization of the National
Food Authority for the New Millenium, " Paper for the Accelerating Gross
Investment and Liberalization with Equity (AGILE) Project, January.
Center for Market and Survey Research (COMPAS). 1988. "Income Security
Programs Client Service Study," Report to Human Resources Development
Canada, August.
De Sousa Santos, B. 1998. "Participatory Budgeting in Porto Alegre: Towards a
Redistributive Democracy," Politics and Society, Vol. 26.
Department of Health. 1996. Administrative Order No. 39.
1998. Philippine Health Situationer.
_. 1999. Health Sector Reform Agenda. Philippines, 1999-2004. Manila,
December.
Department of Social Security, Research Reports. 2000. United Kingdom, 15
February.
Dizon, Ana Marie O., Salome B. Quijano, Isagani Lachica and Ray Leyesa. 2000.
"The UDHA Challenge: Monitoring LGU Compliance, Issues and
Developments in Local Housing." Paper presented during the PHILSSA
Project - SHELTER Summing-up Activity, Ateneo de Manila University, Quezon
City, March 28.
Doeppers, Daniel F. 1998. "Migrants in Urban Labor Markets: The Social
Stratification of Tondo and Sampaloc in the 1890s." In Population and
History: The Demographic Origins of the Modern Philippines, edited by Daniel
Doeppers and Peter Xenos. Quezon City: Ateneo de Manila University Press
and University of Wisconsin-Madison.
Doyo, Ceres P. 1999. "Government Housing Strategy Flawed - David." Philippine
Daily Inquirer, November 14.
Filmer, Deon. 1999b. "Educational Attainment and Enrollment Profiles: A
Resource Book Based on an Analysis of Demographic and Health Survey Data,"
Development Research Group, The World Bank, July.
Filipino Report Card on Pro-Poor Services 168
Bibliography
Gopakumar, K. 1998. "Citizen Feedback Surveys to Highlight Corruption in
Public Services: The Experience of PAC, Bangalore," Transparency
International Working Paper, September.
. 2000. "Millennial Survey of Public Services in Karnataka: Citizens'
Feedback on the State of the STATE," Public Affairs Centre, Bangalore,
Karnataka State, India, February.
Government of the Philippines, 2000: "Education for All: Philippines Assessment
Report".
Government Statistician, Ghana Statistical Service. 1997. "Using Core Welfare
Indicators Survey for Poverty Monitoring in Ghana - Some Selected Results
from the 1997 Ghana Core Welfare Indicators Survey," Accra.
Gwatkin, et. al., 2000. "Socio-Economic Differences in Health, Nutrition, and
Population," World Bank, Washington, D.C.
Herrle, Peter and Emma Porio. 1999. "Housing for the Poor." SELA VIP Newsletter.
October.
Hollnsteiner-Racelis, Mary. 1972. "Becoming an Urbanite," in The City as a Centre
of Change in Asia, edited by D.J. Dwyer. Hong Kong: Hong Kong University
Press.
_ 1981. "The Husband" in Being Filipino: Writings, edited by Gilda
Cordero-Fernando. Quezon City: GCF Books.
Jimenez, Emmanuel and Vincent Paqueo. 1996. "Do Local Contributions Affect
the Efficiency of Public Primary Schools?" Economics of Education Review
15(4):377-86.
and Yasuyuki Sawasa. 1998. "Do Community-Managed Schools Work?
An Evaluation of El Salvador's Educo Program." Impact Evaluation of
Education Reforms, Paper 8. Development Research Group, World Bank,
Washington, D.C.
Jimenez, Pilar R., Elena Chiong-Javier and Judy Carol Sevilla. 1986. "Philippine
Urban Situation and Analysis." Manila: UNICEF.
Karaos, Anna Marie A. 1996. "An Assessment of the Government's Social Housing
Program." ICSI Occasional Paper #1. Institute on Church and Social Issues,
Quezon City. May.
. 2000. "Decentralization, Local Governance and Urban Poverty in Four
Philippine Cities." Paper submitted to the World Bank.
Filipino Report Card on Pro-Poor Services 169
Bibliography
Keyes, William. 1978. Case Study: Metro Manila, Philippines. "Policies Toward
Urban Slums." United Nations Economic and Social Commission for Asia and
the Pacific.
. 1979. "Economic Development and the Housing Problem." Philippine
Studies 27.
In Touch. 2000. A Newsletter of the World Bank Country Office, Manila, Volume 5,
Number 2, March.
Llanto, Gilbert, Aniceto C. Orbeta, Jr., Ma. Theresa C. Sanchez and Marie
Christine G. Tang. 1997. "A Study of Housing Subsidies in the Philippines."
A report preparedfor the World Bank and Housing and Urban Development
Coordinating Council (HUDCC), February 27.
Makil, Perla. 1983. "Slums and Squatters in the Philippines. " Paper preparedfor
the Institute of Developing Economies in Tokyo, Japan, April.
Mangahas, Mahar. 1995. "Self-Rated Poverty in the Philippines, 1981-1992."
International Journal of Public Opinion Research, Vol. 7 No. 1. World
Association for Public Opinion Research.
_ 1997. "SWS Surveys on Self-Rated Poverty," Paper presented during the
21s' General Assembly and Annual Meeting of the Bishops-Businessmen 's
Conference for Human Development, 8 July 1997, Taal Vista Hotel, Tagaytay
City. Social Weather Bulletin 97-16
1999. "Monitoring Philippine Poverty by Operational Indicators," Paper
for Presentation to the World Bank's Poverty Reduction and Economic
Management (PREM) Network, PREM Week 99, July 13-14, Univerity of
Maryland University College, College Park, Maryland. Social Weather
Stations, July.
Miralao, Virginia A. 1992. "Female-headed Households in the Philippines."
Philippine Sociological Review, 40:1-4 (January-December).
Morato, Eduardo A., Jr. "Strategic Reformulation of the Mass Housing Program:
Focus on Housing for the Masses."
Murphy, Denis. 1993. "The Urban Poor - Land and Housing." Quezon City Asian
Coalition for Housing Rights and Habitat International Coalition - Asia.
and Ted Afiana 1994. "Evictions and Fear of Evictions in the
Philippines." Environment and Urbanization, Vol. 6, No. 1.
National Anti-Poverty Commission Quarterly Report, 2000.
Filipino Report Card on Pro-Poor Services 170
Bibliography
National Economic Development Authority. 2000. "Draft Mindanao Sustained
Peace and Development Framework Plan."
National Statistical Coordination Board. 1997. Philippines National Health
Accounts.
National Statistics Office, Philippines. 1998. Final Report: Annual Poverty Indicators
Survey, "Selected Poverty Indicators of the Bottom 40% (Ranking of
Provinces)," Manila, January 2000.
Nolasco, Cynthia D. 1991. "The Urban Poor and the Philippines: A Situationer."
Paper commissioned by the SNV (Office of Netherlands Volunteers). Quezon
City.
Pagtambayayong Foundation. 1999. "Renters in Low-Income Communities in
Cebu City." SELAVIP Newsletter. October.
Paul, Samuel. 1994, "Does Voice Matter? For Public Accountability, Yes," Policy
Research Working Paper 1388. The World Bank Policy Research
Department, Finance and Private Sector Development Division, December.
_ 1995. "A Report Card on Public Services in Indian Cities: A View from
Below," PACResearch Paper No. 1. Public Affairs Centre, Bangalore, India.
. 1995. "Strengthening Public Accountability: New Approaches and
Mechanisms," PAC Research Paper No. 3. Public Affairs Centre, Bangalore,
India.
_____ and Gopakumar K. 2001. A Citizen 's Report Card on Karnataka State's
Governance, Public Affairs Center, Bangalore, India.
Philippine Daily Inquirer, March, 1999.
Philippine Daily Inquirer, March, 2001.
Philippine Institute of Development Studies. 1995. "Health Manpower, Profile,
Stock and Requirements," PIDSDiscussion Paper, Series No. 95-31.
Philippines Governance Forum. 2000. "Government Watch, Summary Report,"
June - July.
Poethig, Richard 1969. "An Urban Squatter Policy for Metropolitan Manila,"
Solidarity, 4:11.
Population and Development Review, 1999. "The Effect of Household Wealth on
Educational Attainment: Evidence from 35 Countries."
Filipino Report Card on Pro-Poor Services 171
Bibliography
Porio, Emma. 2000. "Governance, Civil Society and Urban Poor Communities in
Metro Manila." Paper presented at the Workshop on Southeast Asian Urban
Futures, Singapore, July 21-22.
Racelis, Mary. 1996. "People-Centered Sustainable Cities: Human Welfare and
Society Justice Goals in Industrialization, Employment and Urban
Lifestyles." Paper presented at the CREBA Roundtable International Conference
on Sustainable Cities for the 21s" Century, October 16.
. 2000. "Fighting Urban Poverty in Asian Cities through Effective
Partnership," Paper presented at the Asian Mayor's Forum: Fighting Urban
Poverty, Shanghai, People's Republic of China, June 26-29.
Rebullida, Ma. Lourdes G. 1999. "NGO-PO Approaches to Urban Poor Housing,"
in Housing the Urban Poor; Policies, Approaches, Issues, edited by Ma.
Lourdes G. Rebullida, Dolores A. Endriga, and Geraldine M. Santos.
Quezon City, University of the Philippine Center for Integrative and
Development Studies.
1999a. "Changing Dynamics in Urban Poor Housing," in Housing the
Urban Poor: Policies, Approaches, Issues, edited by Ma. Lourdes G. Rebullida,
Dolores A. Endriga, and Geraldine M. Santos. Quezon City: University of
the Philippines Center for Integrative and Development Studies.
and Dolores A. Endriga. 1999. "Government Responses to the Housing
Problem of the Urban Poor," in Housing the Urban Poor; Policies, Approaches,
Issues, edited by Ma. Lourdes G. Rebullida, Dolores A. Endriga, and
Geraldine M. Santos. Quezon City, University of the Philippine Center for
Integrative and Development Studies.
Reforma, Mila A. 1983. "Housing the Urban Poor: The Tondo Experience."
Quezon City: National Housing Authority.
Republic of the Philippines. Republic Act 7279. 1992. (Providing for a
Comprehensive and Continuing Urban Development and Housing Program,
Establishes the Mechanism for its Implementation and for Other Purposes).
March 24.
. 1999. "Medium-Term Philippine Development Plan 1999-2004,
Executive Summary," Angat Pinoy 2004 Manila.
. Republic Act 7880 (Providing for the Fair and Equitable Allocation of
DECS Budget for Capital Outlay)
_. 1999. Executive Order No. 92, dated April 12.
.2000: "Philippine Agenda for Education Reform: The PCER Report,"
Office of the President
Filipino Report Card on Pro-Poor Services 172
Bibliography
_ 2000. Urban Development and Housing Act.
Robb, Caroline. 2000. "How Can the Poor Have a Voice in Government Policy?"
Finance and Development, December.
Ruland, Jurgen. 1982. "Squatter Relocation in the Philippine." University of
Bayreuth, West Germany. Research Paper No. 5.
Sayos, Anicia C., Ross Q. Quisao and Rosario Manasan. 1998. "Local Efforts in
Housing." PIDS Discussion Paper Series No. 98-44, December.
Sembrano, Madeleine A., Sonia Imperial and Nestor S. Felix. 1977. "Case Studies
on the Improvement of Slums, Squatter and Rural Settlements." Report
submitted to the United Nations Centre for Housing, Building and Planning and
the Institute of Philippine Culture. Quezon City.
Social Weather Stations. 1996. Project Water 1996, National Capital Region. Quezon
City, February 27-March 9.
. 2000. Survey Book on Health, 1989-2000, compiled by Vladymir Joseph
Licudine. Quezon City, August.
I 2000. Survey Book on Food Security, 1990-2000, compiled by Vladimyr
Joseph Licudine. Quezon City, September.
. 2000. Survey Book on Water Services, 1988-2000, compiled by Vladimyr
Joseph Licudine. Quezon City, September.
. 2000. Survey Book on Housing Services, 1991-2000, compiled by Vladimyr
Joseph Licudine. Quezon City, October.
. 2000. Survey Book on Education, 1999-2000, compiled by Vladimyr
Joseph Licudine. Quezon City, October.
_ 2000. Manila Standard, October 26.
Stiglitz, Joseph. 1999. "Participation and Development: Perspectivesfrom the
Comprehensive Development Paradigm, " Luncheon Keynote Speaker Reading
Material. The World Bank, Seoul, Korea, February 27.
Strassman, W. Paul and A.1994. Blunt, "Land Prices and Housing in Manila,"
Urban Studies, Vol. 31, No.2.
Tannerfeldt, Goran. 1995. "Towards an Urban World: Urbanization and
Development Assistance." Stockholm: Swedish International Development
Cooperation Agency.
Filipino Report Card on Pro-Poor Services 173
Bibliography
UNDP. 2000. Philippine Human Development Report.
United States General Accounting Office. 1999. Report to Congressional Requesters,
"Managing for Results: Opportunities for Continued Improvements in
Agencies' Performance Plans," (GAO/GGD/AIMD-99-215), July.
University of Michigan Business School, American Society for Quality, and Arthur
Anderson. 1999. "Federal Agencies Government-wide Customer
Satisfaction Report for the General Services Administration," December.
Urban Poor Associates. 1995. "Philippine NGO Report on the Impementation of
the International Covenant on Economic, Social and Cultural Rights
Concerning the Right to Adequate Housing." Unpublished report prepared by
the Urban Poor Associates in coordination with the Partnership of Philippine
Support Services Agencies (PHILSSA), April.
Urban Research Consortium. 1997. "Metro Manila Urban Poor Housing Study."
Paper commissioned by the Overseas Economic Cooperation Fund (OECF).
Quezon City.
_ 1998. "Study of Land Values in Metro Manila and Their Impact on
Housing Programs." Unpublished report submitted to the Alger Foundation.
Van Naerssen, Ton, Michel Ligthart and Flotilda Zapanta. 1996. "Managing
Metropolitan Manila." In The Dynamics of Metropolitan Management in
Southeast Asia, edited by Jiirgen Ruland. Singapore: Institute of Southeast
Asian Studies.
Wagle, Swarnim. 2001. "Civic Engagement at the Macro Level," Second Year
Paper, Requirements for a Degree of Master in Public Administration in
International Development, John F. Kennedy School of Government, Harvard
University, March.
World Bank. 1992. "Participatory Development and the World Bank, Potential
Directions for Change," edited by Bhuvan Bhatnagar and Aubrey C.
Williams. 183 World Bank Discussion Papers, The World Bank, Washington,
D. C. October.
_ . 1993. World Development Report, The World Bank, Washington, D. C.
. 1996. "A Strategy to Fight Poverty: Philippines." East Asia Pacific
External Affairs, The World Bank, Washington, D.C.
_. 1996. The World Bank Participation Sourcebook, The World Bank,
Washington, D. C., February.
Filipino Report Card on Pro-Poor Services 174
Bibliography
. 1999. Country Assistance Strategy, Philippines 1999-2002. The World
Bank Group, Philippine Country Management Unit, East Asia and Pacific
Region.
. 2000. "Philippines Poverty Assessment," The World Bank, Washington,
D.C.
. 2000. "Combating Corruption in the Philippines," Philippine Country
Management Team, East Asia and Pacific Region. May.
. 2000. World Development Report. The World Bank, Washington, D. C.
. 2000. "Evaluation Capacity Development. The Role of Civil Society in
Assessing Public Sector Performance in Ghana." Proceedings of a Workshop.
Washington, D.C.
,4. a . . < '~~~~~~~~~~~, O IN
- tj2. tt - i , 2R tt8F,p,+, ,,!x ;- 9>n X553 _ , , ~~~~~~~~4-j
1$.CbB ; Tjb _ c Mnn , 5 ,, 10 ,, C_' j.,E
W Sorn I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- _ lMTh A--,Ct
25L CAmr 1 i-o \r2 .xVITE .
o,12.5i73TW- E"i ' S \&rrr ; ;r I ; I j5 3rT>i
CM" ~ ~ ~ ~ ~ ~ ~~~~Cisn,< tvs er_< Wod* M4 n KILOMETERS-i
11.M = ,Wr- I; YA 12-6-
I 5rrs. 9 tg i l
to. ,r i t'&2 r-. S wl
/r r e NC R NrHWCv PACI6 PC h i I i p p;<6b i n
:>TAL A.D \t] 14S1+ i e /S,
29aA P.1- O 677 : SO, kd
W Q- aX,. ; -.- vbfia "t ai rT
3i5 EAl Arfa5 , /''2 2P*i4 2r- ~ r